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Consolidating Below Three-Week Highs

GOLD

Gold deals ~$6/oz softer to print ~$1,720/oz, backing away from three-week highs made on Tuesday (at ~$1,729.5/oz), but holding on to the bulk of that session’s gains at typing.

  • To recap, the precious metal closed ~$26/oz firmer on Tuesday, drawing support from the miss in JOLTS job opening figures (pointing to softening labour demand), with the DXY hitting fresh two-week lows after.
  • The improvement in sentiment likely reflects optimism from some quarters re: a slowdown in Fed tightening amidst soft U.S. economic data prints.
  • Consensus re: a slower pace of Fed hiking remains far from certain however, with Nov FOMC dated OIS now pricing in ~70bp of tightening at that meeting, operating at its highest level in a week.
  • Looking ahead, participants will be on the lookout for more employment data due later this week, capped by NFPs on Friday.
  • From a technical perspective, gold has established a short-term bull cycle, having broken above its 20-Day EMA and trendline resistance. Initial resistance is seen at ~$1,735.1 (Sep 12 high and key resistance), while support is seen at $1,659.7 (Oct 3 low).
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Gold deals ~$6/oz softer to print ~$1,720/oz, backing away from three-week highs made on Tuesday (at ~$1,729.5/oz), but holding on to the bulk of that session’s gains at typing.

  • To recap, the precious metal closed ~$26/oz firmer on Tuesday, drawing support from the miss in JOLTS job opening figures (pointing to softening labour demand), with the DXY hitting fresh two-week lows after.
  • The improvement in sentiment likely reflects optimism from some quarters re: a slowdown in Fed tightening amidst soft U.S. economic data prints.
  • Consensus re: a slower pace of Fed hiking remains far from certain however, with Nov FOMC dated OIS now pricing in ~70bp of tightening at that meeting, operating at its highest level in a week.
  • Looking ahead, participants will be on the lookout for more employment data due later this week, capped by NFPs on Friday.
  • From a technical perspective, gold has established a short-term bull cycle, having broken above its 20-Day EMA and trendline resistance. Initial resistance is seen at ~$1,735.1 (Sep 12 high and key resistance), while support is seen at $1,659.7 (Oct 3 low).