The gold market remains susceptible given the Fed’s aggressive narrative, with significant rate rises on the horizon in the coming months. Hotter-than-expected US inflation, along with an unexpected rebound in retail sales, has convinced investors that higher rates are likely to remain in place for a longer period, supporting the US dollar as well as Treasury yields.

GOLD prices were approaching the lowest in more than two years on Friday, heading for their worst week in two months, as the possibility of aggressive rate hikes by the US Federal Reserve increased bond yields and knocked the luster off bullion.

“The bearish momentum might force a downward price drift till the FOMC (Federal Open Market Committee) meets next week, where a hawkish Fed is expected.” Benchmark 10-year US Treasury rates were at their highest level since June, whereas the dollar was set to advance versus its rivals for the week. After consumer prices unexpectedly jumped in August, investors are pricing in a 75-basis-point rate increase by the US central bank at its September 20-21 policy meeting.

According to data released on Thursday, US retail sales surprisingly increased in August as reduced gasoline costs bolstered spending, while US unemployment claims declined last week. “Everyone is expecting a 75-bp raise, so the question is whether the Fed will continue to tighten aggressively as we approach 2023.

Gold Technical Outlook

The gold price continues to fall sharply to approach our extended objective of 1655.00, sliding under persistent negative pressure that increases the odds of more projected declines in the future period, on its path to further negative targets of 1644.00 and 1630.00.

As a result, we will continue to recommend a bearish trend on an intraday and short-term basis, backed by the negative pressure produced by the EMA50, while keeping in mind that the continuance of the bearish wave is dependent on price stabilization below 1690.00.

Today’s trading range is likely to be between 1640.00 support and 1675.00 resistance.

Today’s projected trend: Bearish