GOLD : Gold is difficult to maintain its position
Updated
- Fundamental analysis:
Gold yesterday continued to fall to around 1860 and then recovered slightly in the context that FED policymakers reiterated their hawkish stance. That raising interest rates and keeping interest rates high for a long time to bring inflation to 2% is necessary
Yesterday the US Senate also passed a bill to avoid a government shutdown this weekend. No economic calendar has been delayed
Today we have a very important data release: PCE - the Fed's favorite inflation measure. Inflation is expected to remain at 0.2%/month and 3.8%/year, still higher than forecast.
If there are no surprises, Gold will continue to be under pressure
- Technical analysis:
Gold had a price drop of nearly $90 within a week from 1948 to 1858. This was the strongest price drop in many months.
Gold yesterday continued to fall to around 1860 and then recovered slightly in the context that FED policymakers reiterated their hawkish stance. That raising interest rates and keeping interest rates high for a long time to bring inflation to 2% is necessary
Yesterday the US Senate also passed a bill to avoid a government shutdown this weekend. No economic calendar has been delayed
Today we have a very important data release: PCE - the Fed's favorite inflation measure. Inflation is expected to remain at 0.2%/month and 3.8%/year, still higher than forecast.
If there are no surprises, Gold will continue to be under pressure
- Technical analysis:
Gold had a price drop of nearly $90 within a week from 1948 to 1858. This was the strongest price drop in many months.
Note
Given positioning, technical and energy price pressures, it would not be surprising to see Gold fall to the low $1,800s if inflation picks up and economic data remains stable. The upcoming core PCE deflator could be the catalyst for the downside.However, we expect Gold to recover and rise to $2,100 in the first half of next year, as the Fed moves to a more dovish policy and physical buying remains strong.
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