Gold prices soared last week, reaching a new all-time high of $2,081 per ounce. Gold prices erased most of the week’s gains by the end of the week though, retreating to $2,015 per ounce but rallied again towards the end of the week. Gold prices extended gains on Tuesday, rising to $2,034 per ounce. If gold prices increase, resistance may be encountered near $2,081 per ounce, while if gold prices decline, support may be found near $1,976 per ounce.
Increased risk aversion sentiment provides support for gold prices. The recent crisis in the banking sector caused risk sentiment to plummet, raising the appeal of safe-haven assets. Fears of a banking sector meltdown enhance gold’s haven status.
In addition, the Federal Reserve signaled a pause in rate hikes last week, boosting gold prices. The Federal Reserve raised interest rates by 25 basis points at its monetary policy meeting last week, bringing the benchmark interest rate to a 16-year high target range of 5.00% to 5.25%. Many analysts predict that there is a high probability of rate cuts starting in November. Expectations of a pivot to a more dovish policy provide support for gold prices.
Gold prices have been predominantly directed by the dollar’s movement, as the competing gold typically loses appeal as an investment when the dollar rises. The dollar rallied on Tuesday, ahead of Wednesday’s CPI data, with the dollar index climbing to 101.6. US Treasury yields also gained strength, with the US 10-year bond climbing to 3.52%.
US CPI inflation data on Wednesday are this week’s most highly-anticipated fundamentals, as they may affect the Fed’s monetary policy. The release of the CPI data on Wednesday may cause volatility in dollar and gold prices.
The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.
as a Liquidity Provider
and reliable execution
Fill in the registration
form and click
Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.
When your live account is approved, you can deposit funds and start trading on your chosen platform!
The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.
If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.
Don't show this message again
These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.