Gold weakens to $1315 level, hangs closer to 5-week lows

Haresh Menghani FXStreet

• Risk-off mood fails to assist build on previous session’s rebound.
• Fed rate hike expectations now seemed to cap any meaningful gains.

Gold struggled to build on overnight rebound from near 5-week lows and has now retreated to the lower end of its daily trading range.

Despite a modest weakness to $1315 level, the precious metal struggled for a firm direction and seesawed between tepid gains/minor losses through the Asian session. A combination of diverging forces failed to provide any fresh impetus and has led to a range-bound/subdued price-action on the last trading day of the week.

A fresh wave of selloff across global equity markets was seen underpinned the commodity's safe-haven appeal. The positive factor was largely negated by firming Fed rate hike expectations, which tends to drive flow away from the non-yielding yellow metal.

Meanwhile, the recent sharp US dollar recovery has been exerting downward pressure on dollar-denominated commodities - like gold since last Friday, with spot prices now trading down more than 1% for the week and remain on track for the second straight weekly loss.

Technical levels to watch

A follow-through selling pressure has the potential to drag the commodity back towards $1308 horizontal support before the fall extends further towards the key $1300 psychological mark.

On the upside, $1322 area now seems to have emerged as an immediate resistance, above which a fresh bout of short-covering could lift the metal beyond $1327-28 intermediate resistance towards its next hurdle near the $1333-35 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Crypto Today: Bitcoin and Ethereum edge lower, XRP extends recovery as macro headwinds weigh

The broader cryptocurrency market is consolidating on Friday, with Bitcoin paring losses slightly above $84,000. Ethereum declines in tandem with BTC. Ripple (XRP), meanwhile, paints a different picture.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Federal Reserve (Fed) and the Bank of Japan (BoJ) have just done something remarkably similar. Both central banks raised interest rates by 25 basis points (bps) last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.