Gold Is Losing Ground As Traders Worry About Hawkish Fed
Gold is losing ground despite weaker dollar. U.S. dollar pulled back against a broad basket of currencies today as traders reacted to housing market reports. Typically, weaker dollar is bullish for dollar-denominated commodities as it makes them cheaper for buyers who have other currencies. However, dollar’s pullback did not provide any support for gold markets in today’s trading session.
Treasury yields were mixed as bond traders evaluated their next moves ahead of the Fed decision, which will be released on October 28. The yield of 2-year Treasuries climbed above the 4.79% level, while the yield of 10-year Treasuries pulled back towards 5.13%.
FedWatch Tool indicates that there is a 82.8% probability that Fed will keep the federal funds rate unchanged at the next meeting. It looks that gold traders are focused on longer-term outlook for Fed policy. The market expects that Fed will raise the federal funds rate in December and will proceed with another rate hike in January.
Oil prices moved away from session highs amid reports indicating that U.S. and Iran were trying to reach a deal. Earlier, some reports showed that a peace deal was close, but these reports have been refuted. Lower oil prices failed to provide support to gold prices today.
Gold declines below the $4150 level and is trying to settle below $4100. In case this attempt is successful, gold will head towards the nearest support, which is located in the $4000 – $4020 range. A move below the $4000 level will push gold towards the $3950 level.
On the upside, gold needs to settle above the resistance at $4160 – $4180 to have a chance to gain upside momentum in the near term. In this case, gold will head towards the resistance level at $4300 – $4320.
Silver Moves Higher As Gold/Silver Ratio Drops Below 71.50
Silver gained ground as gold/silver ratio declined below the 71.50 level. In case gold/silver ratio stays below 71.50, it will head towards the psychologically important 70.00 level, which will be bullish for silver.
From the technical point of view, silver failed to settle below the strong support level at $56.00 – $57.00 and is trying to climb above the $58.00 level. In case this attempt is successful, silver will head towards the $60.00 level. A move above $60.00 will open the way to the test of the resistance at $61.00 – $62.00.
On the support side, a successful test of the support at $56.00 – $57.00 will open the way to the test of the next support at $51.00 – $52.00.
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See all Gold forecastsPlatinum Tests The $1650 Level
Platinum is moving higher as rebound continues. Palladium markets are down by -1.2%, but this move did not put pressure on platinum in today’s trading session.
In case platinum manages to settle above the $1650 level, it will head towards the resistance level, which is located in the $1700 – $1720 range. A move above $1720 will open the way to the test of the 50 MA at $1748.
On the support side, a successful test of the support at $1600 – $1620 will push platinum towards the next support at $1520 – $1540.
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