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Trends & Analysis
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Trends & Analysis
News

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News

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News

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News

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EUR/USD plunges after parliament elections

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Is a big move coming for AMD?

Asset Watch

Gold price corrects lower, what is next?

Wednesday, November 8, 2023

Gold price news, and analysis

• Risk on sentiment and eyes on the Fed members speeches
• The gold loses value as bulls pull back

 

The market risk appetite has taken an upturn since the beginning of this week, primarily driven by the drop in oil prices, which saw West Texas Intermediate crude fall below $80 per barrel for the first time in months. This decline is due to reduced concerns about potential supply disruptions caused by geopolitical tensions in the Middle East. Lower oil prices coupled with signs of weakening in the US labor market as evidenced by the October jobs report and declining wage levels. These factors are expected to put downward pressure on inflation, lessening the necessity for additional interest rate hikes.

Conversely, the US dollar has been fortified by comments from Federal Reserve members, suggesting that it was too early to declare victory over inflation. Such statements maintain the possibility of further interest rate increases. The markets are currently awaiting more clarity on this matter, which is expected to be provided through upcoming speeches by key Federal Reserve members, including Mr. Powell, the Chair of the US Central Bank. The anticipation is that these speeches will reaffirm the commitment to drive inflation levels toward the target of 2% and avoid any insinuations regarding interest rate reductions.

Gold Price Daily Chart

 

Chart source ADSS Platform

On November 3, the gold ended its upward trend and created a lower high at 2004. This week the precious metal witnessed a decline of approximately 1.5% as traders continued to unwind their long positions.
Currently, the gold could be on the way for a test of 1949 and a daily close below that mark could end the current sideways move and potentially start a downward trend that may drive the price towards the support area located between 1916- 1911. That said, the support level at 1933 should be considered.

On the other hand, a daily close above 1981 reflects a possible bulls comeback implying that the price may rally towards 2009 . Nonetheless, the psychological resistance level located at $2000/oz should be watched closely.


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