GOLD (XAU/USD) PRICE FORECAST:
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Gold prices are under renewed selling pressure today as hawkish comments from Fed policymakers reigned in the recent hopes that the Fed are done. Market participants had hoped that Fed Chair Powell might strike a different tone in his speech at the US central bank statistics conference. The Fed Chair however, failed to touch on monetary policy but is back tomorrow once more and could still touch on it then.
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US DOLLAR INDEX RECOVERY FACES KEY RESISTANCE
The Dollar Index is continuing its attempted recovery today but is struggling at the 105.63 area which has served as a key area of resistance in the past. The renewed optimism comes about as Fed policymaker Kashkari and Bowman both hinting at further rate hikes as the economy remains hot.
Looking ahead and it will be interesting to see if Fed Chair Powell will comment on monetary policy tomorrow. Besides that the only other factor that could affect the US Dollar this week will be Michigan Consumer Sentiment preliminary numbers due out on Friday.
US Dollar Index, Daily Chart, November 8
Despite the hawkish rhetoric by policymakers’ expectations for another rate hike have barely moved based the CME FedWatch tool. Markets are still pricing in a 90% probability that the Fed will leave rates at current levels at the December meeting. Given what is left on the calendar this week there is every chance that this will not change.
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Form a technical perspective, Gold continued its decline toward the psychological $1950 level. A break below the $1950 opens the door for a return to $1900 but there will be some key support tests that will need to be navigated first.
The 50, 100 and 200-day MA all rest within a $12 range between with the $1930 support are being the most prominent. It did appear as though we may have a golden cross pattern and that may still occur but we it would require a recovery first.
Key Levels to Keep an Eye On:
Gold (XAU/USD) Daily Chart – November 8, 2023
Source: TradingView, Chart Prepared by Zain Vawda
IG CLIENT SENTIMENT
Taking a quick look at the IG Client Sentiment, Retail Traders are Long on Gold with 58% of retail traders holding Long positions. Given the Contrarian View to Crowd Sentiment Adopted Here at DailyFX, is this a sign that Gold may continue to fall?
For a more in-depth look at GOLD client sentiment and ways to use it, Download the Guide Below!!
of clients are net long.
of clients are net short.
Written by: Zain Vawda, Markets Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda