FxWirePro- Gold Weekly Outlook
Ichimoku Analysis (Weekly Chart)
Gold is trading lower for a second consecutive week and lost more than 75 on the strong US dollar and surging yields. Major central banks which hiked rates are
Fed- 75 bpbs (Hawkish)
BOE – 50bpbs
Norges bank- 50 bpbs
Markets eye Italian elections and Fed Chairman Powell's speech for further movement.
The number of people who have filed for unemployment benefits rose by 5000 to 213000 last week compared to a forecast of 22000. US flash manufacturing and services PMI came better than the estimate.
The US 10 and 2-year spread widened to -58% basis points from -40, the most since 2000. The US dollar index hits a fresh 20-year high and any breach above 113.25 confirms a bullish continuation.
According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Nov rose to 72.9% from 59.7% a week ago.
Factors to watch for gold price action-
Global stock market- Bearish (positive for gold)
US dollar index – Bullish (negative for gold)
US10-year bond yield- Bullish (negative for gold)
The near–term support is around $1625, a close below targets $1620/$1598.The yellow metal faces minor resistance around $1660, breach above will take it to the next level of $1680/$1720/$1735. Minor bullish continuation only if it breaks $1740.
It is good to sell on rallies around$1650-51 with SL around $1662 for TP of $1600.
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