Gold’s Bullish Bias Dominates – Brace for a Buy Position
Skerdian Meta•Thursday, December 1, 2022•2 min read
Gold Technical Outlook
Following Powell’s speech, the market upped its bets on the Federal Reserve, raising interest rates by 50 basis points (bps) in December from 69.9% before the speech to above 75%.
With this, the US Dollar Index (DXY) ended a three-day rally while exhibiting the worst daily loss in a week, not to mention the largest monthly fall in 12 years. It’s worth noting that Wall Street benchmarks praised the Fed Chair’s dovish statements, but US 10-year Treasury bond yields reversed early gains to conclude November on a negative footing, around 3.61%.
Given the inverse link between the US Dollar and GOLD , the metal benefited from a drop in the Greenback by clearing a major technical barrier and drawing purchasers.
In addition to dovish comments from Federal Reserve (Fed) policymakers, weak economic data from the United States (US) supported the previous day’s gold price increase.
Among these, the US ADP Employment Change received significant attention because it recorded the lowest readings since January 2021, with a 127K figure for November vs. a 200K expectation and 239K previous readings. Similarly, the US JOLTS Job Openings for October fell to 10.334M, down from 10.3M projected and 10.687M. On the other hand, the second estimate of the US Gross Domestic Product (GDP) Annualized for the third quarter (Q3) showed a 2.9% increase versus 2.6% early predictions.