• Gold is under pressure on the daily chart, flat in Asia ahead of the FOMC minutes.
  • The price would be expected to move below daily support so long as the resistance holds near the 50% mean reversion around $1,785.

Gold is flat on the day trading at around $1,776.50 and sticking to a tight range of between $1,773.91 to a high of $1,776.85. The yellow metal fell due to rising Treasury yields weighed on investor appetite. A slightly stronger US dollar was also a headwind for investor demand. The greenback is currently steady as investors await the release of the minutes of the Federal Open Market Committee issues minutes from its meeting of July 26-27.

 The US central bank raised its benchmark overnight interest rate by 225 basis points to tame high inflation. The minutes could offer clues on further interest rate hikes. The Fed is expected to raise its policy rate by another 50 or 75 basis points at its next meeting on Sept. 20-21. US Treasury yields have been firm as a consequence and also due to the recession worries and despite nascent signs of a slowdown in inflation.

Several Fed policymakers have spoken of the need for continued rate hikes despite the lower-than-expected outcome of last week's Consumer Price Index. "Fed officials have no choice but to sound tough in the face of a very, very tight labour market and far too high inflation," Kit Juckes, the head of FX strategy at Societe Generale argued. "It's hard to build a compelling case to sell the dollar in that world."

Meanwhile, ''odds of a short squeeze in gold are notably declining,'' the analysts at TD Securities argued. ''However, our CTA positioning estimates suggest that a trend followers buying program contributed to lower rates over the past month, as algos were forced to cover shorts. While this supported higher prices in gold, the bar is razor thin for algorithmic trend followers to add to selling pressures in US10y Treasuries once more,'' the analysts said.

''This should further sap appetite to buy the yellow metal, while the bar for additional short covering rises further. Meanwhile, Shanghai traders are also likely to appear on the offer, particularly amid a weakening CNY. Gold prices are vulnerable, considering we see signs that gold sellers are lurking. Ultimately, prop traders are still holding a massive amount of complacent length, suggesting we have yet to see capitulation in gold, which argues that the pain trade remains to the downside.''

Gold technical analysis

Gold is carving out a bearish case below the counter trendline on the daily chart as follows:

The price has stalled at a prior support level but would be expected to move below it so long as the resistance holds near the 50% mean reversion around $1,785.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

AUD/USD struggling around 0.6400 and at risk of piercing the year’s low

Disappointing Australian data and a deteriorated market mood weighed on AUD/USD, quickly approaching the 2022 low at 0.6362. RBA’s Financial Stability report coming up next.


EUR/USD extends decline sub-0.9800 as risk aversion intensifies

EUR/USD extends decline sub-0.9800 as risk aversion intensifies

The American dollar maintains a strong upward momentum amid renewed inflation and recession concerns. EUR/USD further retreated after failing to regain parity mid-week.


Gold struggling to retain its bullish strength

Gold struggling to retain its bullish strength

XAUUSD shed some ground on Thursday, currently hovering around $1,713.00. The dollar has gathered momentum as Wall Street opened in the red, holding into negative territory at the time. Also, government bond yields resumed their advances and hold near fresh weekly highs.

Gold News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: The next move could surprise us all

The crypto market displays mixed signals but hints that the bearish trend is not over yet. Adopting a get-in-get-out mentality may be the more favorable approach for investors looking to expose themselves to the market.

Read more

US September NFP Preview: Analyzing gold's reaction to NFP surprises Premium

US September NFP Preview: Analyzing gold's reaction to NFP surprises

Historically, how impactful has the US jobs report been on gold’s valuation? In this article, we present results from a study in which we analyzed the XAUUSD pair's reaction to the previous 26 NFP prints.

Read more