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Hopes for a Golden Rally CollapsedGold prices have started a fourth consecutive week with a decline. The yellow metal traded more than $100 above current prices, at around $1780 per troy ounce and was close to $1900. However, investors quickly sold the asset as they were quite disappointed and turned to other more volatile and high-yielding assets. This year the bullion is looking sluggish. It is simply behind most other assets like metals and oil. The trading range for gold is within $200 this year. So, gold prices declined twice this year to the support level of $1690-1700 per ounce, and they were close to the resistance level of $1900-1915 at the beginning of this year and in June. There were no directional movements during the rest of the year as the trading range was narrowing along with the consolidation of gold prices. The tightening of the Federal Reserve’s (Fed) monetary policy is the hot topic of the day as the stronger Dollar has lowered interest for gold as an investment. However, in the long-term perspective gold may restore its safe haven role as inflation in the United States picks up in 2022-2023. The upward trend in gold prices which started on August 9 was broken recently. This fact may drag gold prices down to the support level at $1725-1735. This area is also indicated by the weekly Bollinger low side of the envelope chart. So, if you’re seeking opportunity to buy gold you may find it at $1725-1735 per ounce to hedge inflation risks. The recovery in gold prices is also possible but it is limited by strong resistance levels at $1815-1818 per ounce. But it is hard to expect gold prices will leave the consolidation range this year. However, it would be wise to take a break now, at least before the Fed’s meeting during which a decision on tapering of bond purchases will be made on December 15.
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by scavoanastasiia
Has The USD Avoided The Dreaded Taper Tantrum?With its back up against a wall, the US Federal Reserve has pledged to begin tapering its asset purchase program. Beginning later this month, the Federal Reserve will reduce the number of US Treasury Securities it purchases each month by US $10 billion and the number of Mortgage-Backed Securities by US $5 billion. How did the USD react to the Federal Reserve announcement? By all accounts, a dreaded ‘taper tantrum’ has been avoided in the wake of the announcement. At least in relation to the forex market. Federal Reserve chairman Jerome Powell has been extremely careful to prime investors for this moment. For one, all hawkish commentary from the chairman has been mediated with dovish caveats. Admittedly, less senior Federal Reserve officials have done much of the leg work in hinting and out-right suggesting the need for a reduction in its purchases. Either way, the conversation surrounding tapering has been sustained for months, giving investors time to mull over the implications. As of writing, the USD index, the DXY has crossed back over the 94.00 mark and comfortable sits 94.33, up 0.53% since the Federal Reserve’s tapering announcement. Will the Federal Reserve continue to taper? The Federal Reserve will still be purchasing $105 billion worth of securities, with further reductions dependent on continuing favourable economic outlook. The Federal Reserve has indicated it is considering reducing spending, month over month, moving forward. However, if economic conditions deteriorate, the spending reductions could be nullified or reversed. The Federal Reserve will be keeping an eye on inflation and the number of jobs added to the economy each month. Inflation remains at a decade high A significant consideration of the Federal Reserve when determining its reduction in spending is the US inflation rate. While it is at a 13-year high, the Federal Reserve maintains that most of the inflation experienced heretofore is temporary. Octobers inflation number is released next Wednesday. Trading Economics is forecasting a 0.1% increase in US inflation. Up next: Non-Farm Payroll Another significant consideration of the Federal Reserve when determining its tapering is the Non-Farm Payroll (NFP). The NFP indicates how many non-farm jobs were added to the economy in a given month. The data for the October non-farm payroll will be released tonight to great anticipation. Trading Economics is forecasting 400K jobs, while the market consensus is a little more optimistic and is forecasting 450K jobs. The NFP has disappointed for the past two months, with actual job figures falling far short of the numbers predicted. Even so, the Federal Reserve has seen fit to begin tapering as job growth seemingly slows. Treasury Security Janet Yellen noted the US economy is still short 5 million jobs compared to pre-pandemic times, which will take the US years to recover at the current rate of job growth.
TVC:DXY
by BlackBull_Markets
US30I've been calling this FED induced bullishness on US30, the NFP was not a reflection of what ADP prepared us for, the current NFP numbers superseded the projection as well as previous numbers. Now I'm looking to see a series on new highs on indices, but tread carefully as we've seen Gold's flash crash on Monday. Those who follow me benefit from my insight on this instrument, if you do not yet follow hit the follow button and feel free to comment if you have any suggestions or objections on my ideas.
OANDA:US30USDLong
by Austin_Palmer
WATCH OUT with this PUMP!WATCH OUT GUYS 👉 ALL THIS COULD REVERSE during the Press-Conference, which is why I decided to take a little bit of profit here and rather wait❗️ "The Federal Reserve kept interest rates and its monthly pace of bond buying unchanged Wednesday, even as it acknowledged an improved economic backdrop as vaccine roll outs gather pace." It seems like the market has priced in a potential rate-hike (pretty unlikely to be honest, but the reaction shows it), which is why equities and majors vs USD are pumping. As you can see, the FED still decided to keep its Bond Purchasing Programm unchanged 👉 They probably don`t do anything to cap yields, which WILL likely cause more inflation-worries and so a potential reversal of the current moves due to rising yields. Let`s wait for Jerome Powell and see what he has to tell us!🙏 If he meontions yield-capping- we might see a continuation!
by Trading2ez
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