GOLD → Falters as US Yields and the DXY Advance

GOLD PRICE FORECAST:
- Gold Struggles as Rising US Yields and the Dollar Index (DXY).
- Dollar Index (DXY) in Overbought Territory but Likely to Remain Supported in a Risk-Off Environment.
- IG Client Sentiment Shows that Retail Traders are Overwhelmingly Long with 79% of Traders Currently Holding Long Positions.
- To Learn More About Price Action, Chart Patterns and Moving Averages.

Gold prices dropped further in the European trading session due to the ongoing rise in US Treasury Yields, while the US Dollar remains strong above 106.00. The market sentiment of "higher for longer" has affected risk assets and USD denominated assets following the recent Federal Reserve meeting.

DXY
The US Dollar is gaining support from a possible Government shutdown and weakening global economic data, indicating a slowdown. The higher interest rates offered by the Dollar are keeping it strong as a safe haven. Uncertainty around the Chinese property sector is also boosting its appeal. US housing prices rose in July, and there are upcoming comments from Federal Reserve Policymaker Bowman. Seasonality suggests continued strength for the USD against European countries and emerging market currencies, as noted by Societe Generale economists. It appears that this trend will continue into a 5th year.

The strong US Dollar may lower Gold prices in Q4 as investors prefer the US Dollar over gold as a safe haven. Although market uncertainty has helped support gold prices, if the US Dollar continues to rise, gold could reach new lows in 2023.

US TRASURY YIELDS HOVER AT 2007 LEVELS
US Treasury yields remain at 2007 levels, putting downward pressure on Gold prices. The US 10Y yield is above 2007 levels, reaching a high of around 4.56% yesterday, while the 2Y yield has not increased as much and remains below recent highs around 5.12%.

RISK EVENTS AHEAD THIS WEEK
US Fed policymaker on the docket today, followed by US Durable Goods Orders tomorrow. Final GDP numbers with an expected upward revision on Thursday. Biggest risk event of the week on Friday: US PCE data. A drop in PCE data could weaken the DXY, but not expected now. Significant change in PCE data may come from October onwards due to student debt repayments and consumer strain.

GOLD TECHNICAL OUTLOOK
Gold prices struggled this week despite the potential for a move higher. Technical hurdles around the $1925-$1930 mark and the convergence of moving averages posed challenges. The 50-day MA crossing the 200-day MA indicates bearish momentum. Gold is slightly supported due to rising US yields and the DXY, but a faster decline was expected.

The immediate support for the precious metal is at the $1900 level, with the recent lows of around $1884 being a key focus. If the price drops below $1900, there could be some gains before reaching the recent lows around $1884.

IG CLIENT SENTIMENT
A quick look at IG Customer Sentiment, retail traders are extremely bullish on gold with 79% of retail traders holding long positions. With a view contrary to crowd sentiment, is this a sign that Gold may continue to decline?

코멘트:

🕯 BUY GOLD |  1896 - 1894

🔴 SL: 1890

🟢 TP1: 1900
🟢 TP2: 1914

액티브 트레이드:

Running + 30pips ✔️✔️✔️

코멘트:

After the FOMC event, FED data clearly shows that DXY is very healthy
So the time after that GOLD decreased + Stock decreased because the money flow moved to DXY so its decline was high.
Money is King, USD is King

코멘트:

Initial resistance is expected to be around 1,850 USD/ounce. The perception that higher inflation means higher interest rates makes non-interest-bearing metals somewhat worse off. If as predicted, gold will slide to 1,840 USD/ounce.