Daily Brief, Sept 23 – Everything You Need to Know About Gold Today!
Gold price continues to trade sharply bearish at 1,890 level, violating the triple bottom support level of 1,903 level. On the lower side, g
Good morning traders.
Prices for the yellow metal GOLD closed at 1,899.92, after placing a high of 1,905.28, and a low of 1,882.20. Overall, the movement of gold remained bearish throughout the day, with prices for the precious metal falling for the second consecutive day on Tuesday, on the back of the strong US dollar. The greenback was strong across the board, after positive comments on quantitative easing by the Fed’s Charles Evans.
On Tuesday, the US Dollar Index rose above 94, to a 2-month high, making the US dollar stronger against its rival currencies. The strength of the US dollar exerted pressure on the yellow metal prices, dragging them down on Tuesday.
The rise in the US dollar was due to the hawkish tone of comments by a top Federal Reserve official, Charles Evans, who said that further quantitative easing might not provide additional lift to the US economy. Evans said that the Fed could raise interest rates before the average 2% inflation target is reached. He was also willing to discuss the phase-out strategy with QE.
The hawkish comments by Evans surprised the market participants and strengthened the US dollar, which drove the yellow metal onto the downside.
Meanwhile, in his first day of testimony before Congress on Tuesday, Fed Chair Jerome Powell said that although the US economy was recovering, there were still many factors that were being affected by the COVID-19 pandemic.
According to Powell, economic activity has started to rise from the depressed levels of the second quarter, when most economic activities were shut down due to lockdown measures. However, many economic indicators are showing signs of improvement in the market.
He also said that the US Central Bank was committed to using all of its monetary policy tools for as long as necessary, in order to support the global economic recovery. But Powell refrained from providing any information about new stimulus measures, which helped the gold prices. The gold market saw some modest buying in the late session on Tuesday, after the positive comments by Jerome Powell, and after that, the losses in the precius metal were limited.
Moreover, on the data front, the Richmond Manufacturing Index figures, which were released at 18:59 GMT, showed a rise to 21 against the expectations of 12, lending further strength to the US dollar and exerting more pressure on gold prices. However, at 19:00 the United States Existing Home Sales figures were released. They showed a drop to 6.00M against the predicted 6.05M, weighing on the US dollar and capping further losses in the prices of the precious metal.
Daily Technical Levels
Support Resistance
1,895.84 1,922.44
1,884.07 1,937.27
1,869.24 1,949.04
Pivot Point: 1,910.67
Trading in GOLD remains sharply bearish, at 1,890, and it has violated the triple bottom support level of 1,903. On the lower side, gold may drop further until the next support levels of 1,877 and 1,862. At the same time, resistance stays at the 1,903 and 1,919 levels. The bearish bias remains dominant today. Good luck!
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