© Archyde.com. International gold prices are expected to fall below $1,655
On Thursday (October 13), international gold prices fluctuated in a narrow range as market participants remained cautious ahead of the release of U.S. inflation data. The data is expected to support the Fed’s continued aggressive rate hike expectations, and gold prices are expected to fall below $1,655.
At 15:05 Beijing time, spot gold fell 0.34% to US$1,667.35 per ounce; the main COMEX gold futures contract fell 0.21% to US$1,673.9 per ounce; the US dollar index rose 0.13% to 113.415.
Edward Meir, analyst at ED&F Man Capital Markets, said: “Inflation will remain very sticky for some time and will weigh on gold prices … in the short term, gold will be in a range of $1,620 to $1,740. Meir added that on the charts, gold is still weak and any rebound in gold prices will be short-term as the Fed remains concerned about inflation and remains very hawkish.
U.S. consumer price index data will be released at 20:30 Beijing time on Thursday, and it is expected to increase by 8.1% year-on-year in September, which may consolidate the Fed’s fourth consecutive rate hike expectations of 75 basis points. Minutes of the Fed’s September policy meeting, released overnight, showed Fed policymakers agreed they needed to take a tighter policy stance and then hold it there for a while to lower inflation.
The minutes showed that many Fed officials “stressed that the cost of taking action to reduce inflation may outweigh the cost of taking too much action.” Many officials said they had raised their assessment of the path of rate hikes that might be needed to achieve the committee’s goals.
“The Fed wants to tighten domestic financial conditions to combat persistently high levels of inflation and is determined to achieve this outcome,” said Bob MILLER, head of U.S. fundamental fixed income at BlackRock. “Broadly speaking, markets have adjusted to this reality, and various All measures of financial conditions have reached new heights of restraint. Not only are changes in financial conditions large and abrupt relative to history, but key input levels such as real interest rates, investment-grade yields to the worst, the U.S. dollar and Mortgage rates are now at levels not seen in more than a decade. While credit spreads remain below the recessionary levels of previous periods, the total cost of capital has risen significantly given the rise in risk-free rates.”
On the daily line, the price of gold started a downward iii wave from $1,729, and the bottom support looked at the 38.2% target of $1,655. The iii wave was a sub-wave of the downward (iii) wave that started from $1,808, and the (iii) wave belonged to Downside ((iii)) wave started from $2070.