In the overnight market review (2022.10.18) during the Asian session, spot gold was hovering around the 1650 mark. On Monday, the new British Chancellor of the Exchequer, Hunter, overturned the economic plan of Truss, which helped sterling and British government bonds soar. New York manufacturing data also performed poorly. The dollar and U.S. bond yields were dragged down. The dollar fell 1.05% to a new low in more than a week. Provided rebound momentum to the gold price, which once rose to around $1,668; however, the market’s expectations for further sharp interest rate hikes by the Federal Reserve within the year lingered, and the yields of U.S. Treasury bonds turned up in late trading, and the surge in U.S. stocks also suppressed gold’s safe haven Due to the demand for insurance, the price of gold finally fell back to around the 1650 mark.
In addition to the Federal Reserve, many central banks around the world, such as the European Central Bank, the Bank of England, and the New Zealand Federal Reserve, are still inclined to raise interest rates sharply in the future, which will further increase the opportunity cost of gold; gold ETF holdings continue to decline, and the technical bearish signal is still strong. Before recovering the 21-day moving average of 1669.25, the gold price still tends to fluctuate downward in the market outlook.
Of course, in the short-term, we need to pay close attention to the trend of the US dollar. If the US dollar pulls back further, it may provide the gold price with an opportunity for a shock rebound and adjustment in the short-term.
Trading strategy deployment: it is recommended to go short at high levels
All transactions involve risks, the above analysis is for reference only. When placing an order, be sure to set the lot size and remember to set the stop loss.