Gold price forecast: Is It Worth Placing a Buy Limit at $1,749?

The GOLD prices closed at $1,759.85, after reaching a high of $1,768.95, and a low of $1,749.20. After rising for three consecutive sessions, gold dropped on Tuesday, amid the comeback of the US dollar, after investors started finding refuge in the greenback, after a selloff in the stock market, that was driven by concerns over soaring energy prices.

The US Dollar Index, which measures the valu of the greenback against a basket of six major currencies, rose to 94.07 on Tuesday, after fears accelerated in the market, relating to rising oil prices. This, in turn, could add to the existing inflationary pressures. The 10-year US Treasury Yields also surged, rising to 1.50%, which added strength to the greenback and ultimately dragged the yellow metal to the downside.

Review of Economic Events

On the data front, at 17:30 GMT, the Trade Balance for August was released, showing a deficit of -73.3B against the forecast of -70.5B, which weighed on the US dollar. At 18:45 GMT, the Final Services PMI for September came in, showing a surge to 54.9, against the projected 54.4, which supported the US dollar, putting further downside pressure on the gold price.

According to the data released at 18:54 GMT, October’s IBD/TIPP Economic Optimism dropped to 46.8, against the estimated 51.3, which impacted negatively on the US dollar. At 19:00 GMT, the ISM Services PMI for September came in, indicating a surge to 61.9, against the predicted 59.9, which bolstered the greenback and put further downward pressure on gold.

Furthermore, investor focus was also on the US non-farm payrolls data that is scheduled for Friday. It is expected to show continued improvement in the labor market, which could prompt the US Federal Reserve into starting to taper its monetary stimulus before the end of the year.