Gold Price Prediction: Is It Worth Placing a Buy Limit at $ 1,749?

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  • Gold prices closed at $ 1,759.85, after hitting a high of $ 1,768.95 and a low of $ 1,749.20.
  • The US dollar index, which measures the value of the greenback against a basket of six major currencies, hit 94.07.
  • August’s trade balance posted a deficit of -73.3 billion compared to the forecast -70.5 billion, weighing down on the US dollar.

The GOLD prices closed at $ 1,759.85, after hitting a high of $ 1,768.95 and a low of $ 1,749.20. After three consecutive sessions of the rise, gold fell on Tuesday, amid the return of the US dollar, after investors began to take refuge in the greenback, after a massive sell-off in the stock market, motivated by concerns about soaring energy prices.

The U.S. dollar index, which measures the value of the greenback against a basket of six major currencies, rose to 94.07 on Tuesday, after fears accelerated in the market over rising prices of the dollar. oil. This, in turn, could add to existing inflationary pressures. The 10-year US Treasury yields also surged, reaching 1.50%, which strengthened the greenback and ultimately dragged the yellow metal lower.

It was another frustrating day of trading for the gold market as investors focused more on short-term developments, like the greenback’s gains and Treasury yields, while ignoring the ongoing energy crisis. which results in negative growth. The US stock market saw a massive sell off on Tuesday, amid concerns over rising inflation, the energy crisis, fragile US-China trade ties, the Evergrande debt crisis in China and the deadlock on the US debt ceiling.

All of the above factors combined and dampened risk appetite for stocks, prompting investors to take refuge in the US dollar. The rise in the price of the greenback then weighed on the precious metal.

Review of economic events

On the data side, at 5.30 p.m. GMT, the August trade balance was released, posting a deficit of -73.3 billion compared to the forecast of -70.5 billion, which weighed on the US dollar. At 6:45 p.m. GMT, the September final services PMI went into effect, posting a rise to 54.9, from an expected 54.4, which supported the US dollar, putting further downward pressure on the price of gold .

According to data released at 18:54 GMT, October IBD / TIPP economic optimism fell to 46.8, from an estimated 51.3, which negatively impacted the US dollar. At 19:00 GMT, the ISM Services PMI for September went into effect, showing a rise to 61.9, from 59.9 expected, which supported the greenback and put further downward pressure on gold.

In addition, investors’ attention has also been drawn to data on non-farm wages in the United States which is due out on Friday. It is expected to show continued improvement in the labor market, which could prompt the US Federal Reserve to start cutting its monetary stimulus before the end of the year.

In addition, Federal Reserve Vice Chairman Randal Quarles said on Tuesday that U.S. lenders and corporate borrowers need to step up the pace of their switch from LIBOR to the new benchmark rates. He also said that after December 31, LIBOR may no longer be used in new financial contracts.

Gold Price Prediction: Is It Worth Placing a Buy Limit at $ 1,749?

Gold was trading at $ 1,756 an ounce on Tuesday, with a bearish bias. He is currently receiving immediate support at the 1754 bar, which has been extended by an intraday pivot point. Gold broke through the 1762 pivot point support mark, exposing it to the 1754 support level.

Daily technical levels

Support resistance
1,749.71 1,769.46
1,739.58 1,779.08
1,729.96 1,789.21
Pivot Point: 1 759.33

On the downside, a breakout at the 1,754 level would open the precious metal at the 1,747 and 1,739 levels. A breakout at 1739 would expose gold at the 1731 level. On a positive note, the next resistance level for GOLD remains at 1762, and a breakout at that level would open the precious metal at the 1770 level. Both the RSI and the Stochastic support a selling trend in GOLD; therefore, a bearish bias prevails below 1762 and vice versa.


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