The yellow traded with a mild negative bias through the early European session and is currently placed at daily lows, around the $1224 region. Where is the yellow metal next headed? Today’s gold technical forecast explains.
22 October, GKFX – The precious metal continued with its struggle to build on the positive momentum further beyond 100-day SMA and remained confined within a broader trading range, held over the past one week or so.
Moody’s downgrade of Italy’s credit rating to Baa3, a notch above junk status, and a stable outlook was well received by the market and a continuous improvement in investors’ appetite for riskier assets dented the precious metal’s safe-haven status.
This coupled with firming prospects for gradual Fed rate hikes beyond 2018, reinforced by last week’s FOMC meeting minutes, further collaborated towards capping any immediate upside for the non-yielding yellow metal.
However, a subdued US Dollar price action, which tends to underpin demand for the dollar-denominated commodity, might turn out to be one of the key factors helping limit deeper losses, at least for the time being.
Hence, it would be prudent to wait for a convincing break through the near-term range before traders start positioning for the commodity’s next leg of directional move.
This week’s key events/macro releases, including the latest ECB monetary policy decision and advance US Q3 GDP growth figures, will play an important role in determining the commodity’s near-term trajectory.
Gold Technical Forecast
Immediate support is pegged near the $1220-18 region, below which the slide could further get extended towards $1211-10 intermediate support en-route the $1206 level.
On the flip side, a sustained move beyond the $1230 immediate hurdle now seems to pave the way for additional gains and accelerate the up-move further towards $1240 resistance ahead of $1247-48 supply zone.
This article was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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