Today’s Gold Price Analysis
Gold Falls 1% as the Dollar Rises Attention Turns to the Fed Meeting Minutes
Gold prices fell by more than 1% on Wednesday as the dollar strengthened, while investors awaited the release of the minutes from the Federal Reserve’s September meeting to gauge policymakers’ support for further interest rate hikes.
Spot gold fell to $4,115 per ounce.
There is a sense of caution ahead of the release of the latest minutes from the Federal Open Market Committee meeting later today. Until there is greater clarity on this issue (support for interest rate hikes), there is likely to be some hesitation in establishing large investment positions in gold.
Following the release of weaker-than-expected U.S. jobs data, markets now largely expect the Federal Reserve to keep interest rates unchanged in October, but they still price in an 86% probability of a rate hike in December.
Higher interest rates reduce the appeal of gold, which does not generate a yield.
There are still factors supporting gold against a decline, such as geopolitical uncertainty, concerns about government debt, and demand from central banks.
On the other hand, delegates attending the London Bullion Market Association’s (LBMA) annual conference in Italy predicted that the price of gold would reach $5,013 per ounce over the next 12 months.
Official data also showed that the Chinese central bank stepped up its gold purchases in September, continuing its buying streak for the 23rd consecutive month.
Gold from a Technical Perspective
Gold prices retreated today to near $4,115 per ounce, as the precious metal completed a harmonic shark pattern on the hourly chart, accompanied by a positive divergence in the MACD indicator.
On smaller time frames, gold has also reached near the lower boundary of the descending price channel.
We expect some upward rebounds for gold from current prices toward $4,140 as a first target, followed by $4,190 as a second target.
This scenario would fail if prices break below the $4,100 level with a close on at least a 4-hour candle.
