The support underneath the international gold price is 1721 US dollars
On Tuesday (November 22), international gold prices rose while the US dollar index fell. However, the price of gold is still technically bearish in the short term and the bottom support is at $1,721. As for the possible adjustment of the Fed’s policy outlook, investors’ attention has turned to the upcoming November Fed meeting minutes for clues about future interest rate hikes.
As of 3:05 pm Beijing time, spot gold was up 0.19% to $1,741.06 an ounce; the main COMEX gold futures contract rose 0.15% to $1,742.2 an ounce; the US dollar index fell 0.13% to 107.682.
The minutes of the November Fed meeting will be released at 3 am Beijing time on Thursday (November 24). Most traders are betting that the Fed will raise interest rates by 50 basis points in December. A 75 basis point hike is less than 25% likely after recent comments from Fed officials.
Stephen Innes, managing partner at SPI Asset Management, said: “With investors not expecting any new material information, the possible threat from the minutes is that the FOMC will play down any chance of policy shifting from tightening to aggressively easing.” But overall, bets on more favorable inflation should support gold investors’ bets on a recession in the first half of next year and the Fed’s eventual move to rate cuts.”
Cleveland Fed Chair Loretta Mester said the central bank could cut interest rate hikes starting next month. Earlier, Atlanta Fed Chairman Bostic also opposed another 75 basis point rate hike. All of these challenge dollar bulls and help gold rally.
Phillip Futures analyst Avtar Sandu said in a note that Mester’s dovish comments were a “relief for gold bulls” and that the only factor that could push gold back below $1,700 was ” an unexpected rise in the US CPI”.
On the hourly chart, the price of gold fell below $1746 and the lower support saw $1721 and $1701 which were the 23.6%, 38.2% and 50% Fibonacci retracement levels respectively % bullish range of $1616-1786.
