Gold edges higher as dollar eases; hawkish Fed limits gains
Gold prices edged up on Thursday as the dollar eased slightly, but comments from U.S. Federal Reserve policymakers suggesting the central bank could accelerate stimulus tapering weighed on the metal and kept it well below the key $1,800 mark.
Spot gold rose 0.2% to $1,792.05 per ounce by 0137 GMT, after slipping to its lowest since Nov. 4 on Wednesday. U.S. gold futures added 0.4% to $1,791.70.
The dollar index edged 0.1% lower off its highest in 16 months hit on Wednesday, reducing the metal’s cost to buyers holding other currencies.
Spot silver rose 0.5% to $23.64 per ounce. Platinum gained 1.2% to $986.27 and palladium was up 0.7% at$1,864.29.
· Spot gold may extend bounce towards $1,803-$1,817 range
Spot gold may extend its bounce towards a range of $1,803-$1,817 per ounce, following its stabilisation around a support at $1,786.
The support is strengthened by a similar one established by a rising trendline.
Coincidentally, a five-wave cycle ended around these supports.
The drop from $1,786.90 is so enough that it confirms a reversal of the trend from $1,720.49. As a result, the current bounce may be weak, to end below $1,817.
· Gold Price Forecast: Rising US real yields to increase the downside pressure on XAU/USD – Credit Suisse
Rising real yields should put pressure on gold. In the view of strategists at Credit Suisse, the precious metal may be in the throes of constructing a large top.
Resistance at $1,877 is expected to cap
“Our base case remains that we are close to a peak in inflation expectations and 10-year US Real Yields are in the process of building a large and important bearish ‘wedge’ reversal. If our view is correct, it would suggest gold may in fact be forming a large and significant top.”
“The immediate risk is seen lower for support next at $1,759, removal of which can see a retest of long-term pivotal support at $1,691/77. Beneath this latter area at any stage would in our view mark a major top.”
“Resistance at $1,877 is now expected to cap but only above $1,917 would suggest we are seeing an important turn higher.”
· Investors watch retail stocks as U.S. holiday shopping beckons
Investors are zeroing in on a number of hot retailers' shares as the U.S. holiday shopping season kicks into high gear this week, weighing the potential for supply chain problems against expected strong consumer demand.
· China regulator seeks to avoid U.S. delistings of Chinese firms
· Australia Q3 business investment slips, outlook surprisingly resilient
· Japan's service prices rise for 8th straight month as freight cost spikes
The prices Japanese companies charge each other for services rose 1.0% in October from a year earlier, their eighth straight month of gains and a sign inflationary pressure was building due to higher global commodity costs.
The services producer price index hit 105.4 in October, the highest since November 2001, Bank of Japan (BOJ) data showed on Thursday.
· S.Korea raises interest rates as inflation, household risks grow
South Korea's central bank raised interest rates for the second time since the pandemic began and revised up its inflation outlook on Thursday as concerns about rising household debt and consumer prices grew.
The Bank of Korea is expected to continue its policy tightening cycle with rates tipped to reach 1.50% by the end of 2022, raising concerns about whether households will be able to service their debt repayments.
The BOK's monetary policy board lifted borrowing costs (KROCRT=ECI) by 25 basis points to 1.00% - a move expected by 29 of 30 analysts in a Reuters poll.
· India seeks to block most cryptocurrencies in new bill, government says
Reference: Reuters,CNBC, Business Recorder
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