· Gold Price Forecast: XAU/USD breaks $1,785 support confluence ahead of Fed
In addition to the Fed, the US ADP Employment Change, ISM Services PMI and Factory Orders will also entertain the gold traders. However, major attention will be on how much tapering the US central bank manages to agree upon considering the fresh covid fears and reflation woes.
· Technical analysis
Gold defies a three-week-old ascending trend channel, also slipped below 100-DMA, while printing $1,781 as a quote amid receding bullish bias of the MACD and descending RSI line.
Given the rejection of the bullish chart pattern, backed by bearish oscillators, gold prices are likely to decline towards an early October’s swing high near $1,770.
Following that, a horizontal area comprising multiple levels marked since September 16, near $1,745, holds the gate for the bullion’s further weakness target’s September’s low near $1,721.
On the flip side, a corrective pullback beyond $1,785 support confluence, now resistance, could trigger the run-up to a $1,810 level comprising a two-month-long descending trend line and a horizontal line from late August.
In a case where the gold buyers manage to conquer the $1,810 hurdle, the upper line of the short-term bullish channel near $1,824 becomes crucial for the run-up to the “double top” marked in July and September around $1,834.
To sum up, a clear downside break of a short-term rising channel lures gold bears ahead of the Fed’s verdict.
· Ether scales $4,600 to record high, bitcoin trails
Ether, the world's second-largest cryptocurrency, hit an all-time high on Wednesday, catching up with bitcoin's rally and riding on news of wider blockchain adoption.
The ether token, which underpins the ethereum blockchain network, rose to as high as $4,643 in Asian hours, breaching the previous day's $4,600 and taking the week's gains to more than 10%.
Bitcoin (BTC) was trading around $63,078 and is up about 117% this year, while ether is up six-fold.
· The Fed is expected to announce its stimulus tapering timeline at 1400 GMT on Wednesday. It is likely to begin paring its monthly asset purchases by $15 billion each month until ending them by mid-2022.
Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of gold, which pays no interest.
The end of Britain’s furlough program has not led to a surge in new job-seekers, according to data that suggests unemployment is unlikely to rise sharply and could bolster the case for a Bank of England interest rate hike.
Japanese policymakers on Tuesday reaffirmed the Bank of Japan’s commitment to its 2% inflation target in a meeting held between the central bank chief and the country’s economy and finance ministers.
Activity in China’s services sector expanded at a faster pace in October, buoyed by robust demand, although rising inflationary pressures weighed on business confidence for the year ahead, a private survey showed on Wednesday.
· Republican Youngkin wins Virginia governor's race in setback for Biden, Democrats
Republican Glenn Youngkin won the Virginia governor's election and another Republican was within striking distance in New Jersey's gubernatorial contest on Wednesday, a warning that President Joe Biden's Democrats are in trouble heading into next year's congressional elections.
· China sets target for coal use at power plants by 2025
· Half of Beijing’s flights are canceled as China’s capital city tightens Covid restrictions
· Australia's CBA offers crypto trading, breaks ranks with industry
Commonwealth Bank of Australia (CBA.AX) will become the country's first main-street bank to offer a platform for retail customers to trade cryptocurrencies, breaking industry ranks as it looks to match offerings from rival fintech firms.
· South Korean teens drive up COVID-19 cases ahead of full school reopening
South Korea said on Wednesday it would ramp up COVID-19 testing at schools after a sharp rise of infections among children, weeks ahead of a plan to fully reopen schools nationwide.
· Indonesia could phase out coal by 2040 with financial help, finmin says
Indonesia could phase out coal-fired power plants by 2040 if it gets sufficient financial help from the international community, the finance minister told Reuters.
· New Zealand unemployment rate drops to record low in Q3
· Egypt PMI edges down in Oct as global bottlenecks cut into output
Egyptian activity in the non-petroleum private sector contracted for an 11th month in October as international supply chain bottlenecks slowed production and weighed on future output expectations, a survey showed on Wednesday.
IHS Markit's Purchasing Managers' Index (PMI) inched down to 48.7 - below the 50.0 threshold that separates growth from contraction - from 48.9 in September.
Reference: CNBC, Reuters, FXStreet
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