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Gold’s Subtle Retreat to $2,030 Amidst Rising Dollar and Yields

During Tuesday’s early Asian session, the price of GOLD (XAU/USD) modestly retracted to $2,030, while the US Dollar Index (DXY) escalated to 103.60, and the yield on 10-year Treasury notes saw a modest recovery from 4.24% to 4.32%. Currently, gold is trading slightly higher by 0.12% at $2,030.

Federal Reserve Chair Powell underscored the central bank’s readiness to extend its policy tightening, counterbalanced by market sentiments that the rate hike cycle may have concluded. Powell acknowledged the effectiveness of the current monetary policy in decelerating the economy, signaling a shift into a phase of restrictive interest rates.

This potential end to the tightening cycle could prove favourable for GOLD , which typically benefits from lower interest rates while struggling under higher ones.

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In economic news, US factory orders in October experienced a 3.6% month-over-month decline after previously increasing by 2.3%, as reported by the US Census Bureau. Additionally, geopolitical tensions were stoked by an attack on an American warship and commercial vessels in the Red Sea, which might amplify safe-haven investments and support GOLD prices.

Upcoming economic indicators, including the Chinese Caixin Manufacturing PMI, are projected to show a slight improvement, which may place pressure on gold prices, considering China’s significant role in GOLD production and consumption.

Furthermore, the US ISM Manufacturing PMI and further commentary from Fed Chair Powell are likely to be closely scrutinized by investors.

From a technical perspective, gold prices have descended, reaching an initial bearish target at $2,035.00. The continuation of this downward trend could lead to testing the support line of the bullish channel near the $2,000.00 mark.

Should prices breach the $2,030.00 level, it could smooth the path towards this expected goal, whereas maintaining above this threshold might trigger a corrective rally, potentially retesting the $2,075.25 area.

Today’s projected trading range lies between the support level of $2,000.00 and the resistance mark at $2,050.00, with the day’s trend expected to lean bearish.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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