· Gold poised for best week since early May as dollar, yields ease
Gold was set on Friday for its best week in more than five months as a retreat in the U.S. dollar and Treasury yields lifted the metal’s appeal despite a looming Federal Reserve taper.
Both the dollar index and benchmark U.S. 10-year Treasury yields pulled back from their multi-month highs.
Despite a broadly shared view that the U.S. labor market has healed enough to allow the Fed to start reducing its monthly bond purchases as soon as next month, policymakers are sharply divided over inflation and what they should do about it.
The International Monetary Fund’s steering committee on Thursday urged global policymakers to monitor pricing dynamics closely, but to “look through” inflationary pressures that are transitory and will fade as economies normalize.
· Gold Price Forecast: XAU/USD to enojy additional upside on a close above 200-DMA at $1796
Gold price is meandering in a narrow range below $1800 so far this Friday, awaiting the US economic releases for the next big move. As FXStreet’s Dhwani Mehta notes, XAU/USD still awaits a weekly closing above the critical 200-Daily Moving Average (DMA) at $1796 to see further upside.
“Attention now turns towards the critical US consumer-centric data. The US Retail Sales are expected to drop 0.2% MoM in September while the core figure is seen lower at 0.5%. Below-forecast American data is likely to add to the corrective pullback in the USD, as the Treasury yields could resume the downside.”
“The bulls await a daily closing above the 200-Daily Moving Average (DMA) at $1796 to unleash further upside. At that level, the bearish 100-DMA hurdle coincides. The next relevant target is seen near $1807-$1809, mid-September highs. The September highs of $1834 will be in sight if gold bulls gain conviction.”
“Any pullback in the price would call for a test of the horizontal 50-DMA support at $1777, below which the previous important resistance-turned-support of the mildly bullish 21-DMA at $1761 will get tested.
· Gold Price Forecast: XAU/USD to hit $1850 before tanking through next year and beyond – ANZ
Gold remains within the $1,750-70 range. Strategists at ANZ Bank expect XAU/USD to reach $1850 but to suffer a reverse back lower in the next year and beyond.
“Supportive factors for gold are waning with Fed tapering drawing closer. That said, risk around slower growth against higher inflation still sees a sustained strategic allocation to gold amid prevailing low rates backdrop.”
“We expect gold prices to reach $1850/oz before retreating through next year and beyond.”
· Silver: Best Month In Five Looms For The ‘Poor Man’s Gold’
After four months in the dump, the fortunes of silver have turned, with the so-called “poor man’s gold” putting on its most sparkling show since May.
Technicals suggest this rally has a few resistance points to clear before it fades.
Also, gold, silver’s more “illustrious cousin,” is displaying the signs of a possible breakout that have already brought it back to $1,800 an ounce, setting the stage next for north-$1,900 pricing last seen in June.
· U.S. SEC poised to allow first bitcoin futures ETF - Bloomberg News
· Powell still favorite for Fed reinstatement but investors examine alternatives
· Global economy faces biggest headwind from inflation
Global inflation is spreading to a wider range of goods and services, as the rapid recovery in spending overwhelms the short-term ability of manufacturers, freight firms and service providers to increase output.
· ECB’s Wunsch: Inflation jump is transitory
The European Central Bank (ECB) policymaker Pierre Wunsch said on Friday, the rising price pressures in the Euro area are transitory.
· Chip shortage could persist for another 2 to 3 years, major Chinese consumer goods maker warns
· Japan cuts export view for 1st time in 7 months in Oct report
Japan slashed its view on exports in its October economic report for the first time in seven months as Asia-bound shipments of cars and electronic parts peaked out amid supply chain constraints and China’s economic slowdown.
· Japan's Q3 growth forecast trimmed further on COVID-19 drag
Japan's economy likely grew at a slower pace than previously expected last quarter and faces ongoing risks from soaring raw material prices and coronavirus-linked production and supply disruptions, a Reuters poll of economists showed on Friday.
· BOJ likely to cut growth forecast as supply constraints hit output - sources
· Japan central bank will seek digital yen with 'simple' design, says BOJ official
· S.Korea central bank chief says raising interest rates possible in November
Reference: Investing, FXstreet, Reuters, CNBC
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