XAUUSD - Gold is still plunging and shows no signs of stopping
World gold prices fell sharply with spot gold down 21.3 USD compared to brightness, falling to 1,828.4 USD/ounce. Gold futures last traded at $1,844.60 an ounce, down $21.50 from the bright spot.
The USD reached its highest level in 10 months and US Treasury bond yields increased to their highest level in 16 years, which are factors hindering gold's reversal.
Another factor that is detrimental to gold is the improvement in sentiment in the market. Accordingly, investors became more optimistic when US President Joe Biden signed a temporary budget law to prevent the risk of a Government shutdown. This act helps allocate funds to ensure the federal government can maintain operations within 47 days (until November 17). Previously, markets seemed certain of the possibility of a government shutdown at the end of last week.
Most experts believe that it will be difficult for gold to reverse in the short term when the monetary policy stance of the US Federal Reserve (Fed) is still very positive. However, they still maintain their optimism about gold in the medium and long term.
Heraeus analysts used developments in the gold market in 1984, a year after the Fed cut interest rates for the first time after a bullish cycle, to explain the current developments. During that year, gold was 10% higher than the day the interest rate cut was decided. 2 years later, gold has increased more than 18%. The USD tends to weaken, US Treasury bond interest rates decrease and the economy tends to worsen. All of these factors could play a role in supporting gold prices.
They admit that gold's short-term outlook is challenged by rising yields. “The average rate tightening cycle usually lasts for 21 months with a total increase of 3.02%, but this time is clearly over,” these analysts wrote. Historically, long-term yields peak just before the Fed stops raising short-term interest rates.” Heraeus experts also emphasized that, after 10-year Treasury yields peaked, it was only a matter of time before Fed Chairman Jerome Powell started cutting interest rates.
The USD reached its highest level in 10 months and US Treasury bond yields increased to their highest level in 16 years, which are factors hindering gold's reversal.
Another factor that is detrimental to gold is the improvement in sentiment in the market. Accordingly, investors became more optimistic when US President Joe Biden signed a temporary budget law to prevent the risk of a Government shutdown. This act helps allocate funds to ensure the federal government can maintain operations within 47 days (until November 17). Previously, markets seemed certain of the possibility of a government shutdown at the end of last week.
Most experts believe that it will be difficult for gold to reverse in the short term when the monetary policy stance of the US Federal Reserve (Fed) is still very positive. However, they still maintain their optimism about gold in the medium and long term.
Heraeus analysts used developments in the gold market in 1984, a year after the Fed cut interest rates for the first time after a bullish cycle, to explain the current developments. During that year, gold was 10% higher than the day the interest rate cut was decided. 2 years later, gold has increased more than 18%. The USD tends to weaken, US Treasury bond interest rates decrease and the economy tends to worsen. All of these factors could play a role in supporting gold prices.
They admit that gold's short-term outlook is challenged by rising yields. “The average rate tightening cycle usually lasts for 21 months with a total increase of 3.02%, but this time is clearly over,” these analysts wrote. Historically, long-term yields peak just before the Fed stops raising short-term interest rates.” Heraeus experts also emphasized that, after 10-year Treasury yields peaked, it was only a matter of time before Fed Chairman Jerome Powell started cutting interest rates.
Comment:
BUY XAUUSD 1815.xx -1813
✔️TP1: 1819
✔️TP2: 1823
❌SL:1809
✔️TP1: 1819
✔️TP2: 1823
❌SL:1809
Comment:
BUY XAUUSD +70pips
Comment:
Congratulations to the members who won both orders yesterday
✔️TP1: 1815
✔️TP2: 1810
❌SL: 1830