Gold analysis and news:
- He went Recovery faces first hurdle in 1750-60
- Moving from the height of the hawks bodes well for gold
Gold recovery faces the first hurdle
The lack of guidance from Fed Chair Powell provided the impetus for gold to extend recent gains, hitting a two-week high. Besides, while the Fed will continue to raise interest rates, there is a sense that we may have moved on from the height of the hawkish peak. This, in turn, bodes well for gold, especially against the backdrop of increased recession risks. Gold has been an unwelcome asset for much of the year and for good reason as real returns have increased significantly. However, with the US 10-year real yield down 50 basis points from its June peak, Money is now net shortThe outlook is more encouraging for gold bugs.
From a technical perspective, the recent recovery in the precious metal faces its first major test on the upside as resistance lies at $1750-60. While this may be a cap on her first approach, a breakout and a close above $1,760 would be very encouraging, and open the door towards a move to $1800.
Gold Chart: Weekly Time Frame
Elsewhere, gold traders will have their eyes on the US 10-year yield that appears to be showing a head and shoulders pattern, and expect it to move to 1.9% if a strong breakout below 2.7% is achieved.
US 10-Year Yield Chart: Daily Time Frame