Technically, gold price is poised to test the critical $1834 hurdle after the big breakout witnessed on Friday. An impending bull cross on the daily sticks also remains supportive for the additional upside in gold price.
Gold was an impressive performer in these past few sessions and XAU/USD has moved in towards the $1,830s, albeit still not quite there yet. $1,830, as illustrated below, is a key technical area on the longer-term charts, so it is paramount that bulls get over the line in the coming week.
Meanwhile, XAU/USD is trading at $1,824.67 and holds in bullish territory, ''itching for a breakout,'' as analysts at TD Securities say. ''Prices are set to challenge the multi-month downtrend from all-time highs. Counter-intuitively, this comes after a strong nonfarm payrolls report — but as noted, this datapoint does little to resolve the debate on inflation, nor does it inform the Fed's reaction function.'
In this regard, gold extended recent gains at the start of the week amid stronger investor demand. ''The weaker USD, combined with rising inflation expectations supported an appetite for the precious metal,'' analysts at ANZ bank argued.
Focus is on US real yields
In this context, US real yields are plummeting, in support of gold prices. ''While the breadth of gold traders' short positions is not extreme by any means, position sizing is bloated considering the number of participants short, which leaves the hawks vulnerable to a squeeze,'' analysts at TD Securities said.
''Importantly, the market's microstructure still features little market depth, which suggests that a positioning squeeze could have an outsized impact on prices. Further, a breakout north of the multi-month downtrend could help the trend of ETF outflows reverse, powering gold prices even higher. Unfortunately for the bulls, we expect that a recent CTA buying program has run its course, suggesting algorithmic trend follower flow will not lend its support.''
The above is an example of what could come from a break above the descending trendline resistance from a monthly perspective as the bulls gear up towards a run on the psychological $1,900 and then the $2,000 milestone.
.png)
Short-term inflation expectations increased in October and consumers' expectations for how much money they will earn and spend over the next year rose to the highest level in eight years, according to survey findings released by the New York Federal Reserve on Monday.
Median expectations for what inflation will be one year from now rose in October for the 12th straight month to 5.7% from 5.3% in September, reaching a new high for the survey launched in June of 2013. However, medium-term inflation expectations for what inflation will be in three years remained unchanged in October at 4.2% after three consecutive months of increases.
Consumers said they expected household income to grow by a median of 3.3% in one year, up from 3.0% in September and reaching a series high. Expectations for how much more consumers expect to spend a year from now rose to 5.4% in October from 5.0% the previous month, also reaching a new high.
The median expectations for the year-ahead change in the price of gas rose sharply to 9.4% in October from 5.9% in September, the survey found. Consumers also said they expect further increases in the cost of college, food and rent.
Thai
Eng