Gold breaks neckline
Gold has been trending lower over the past couple of days, potentially catching down with copper and oil.
do watch out for a sharp correction in the metal, with oil and copper already falling sharply on Chinese demand concerns this week.
Gold had been able to hold its own relatively well so far, but as we warned in the previous post, a correction was likely.
On the one hand, it had been supported because of investors trying to price out the risks of further sharp rate increases in the US and lean towards the possibility of the Fed tilting to a more dovish stance amid expectations that inflation has peaked.
On the other hand, they will be keen not to take excessive risk after last week’s big up move and in light of fresh concerns over China, something which weighed heavily on some commodities this week. Also, the Fed is still hiking, which should limit the downside for the dollar.
With gold now breaking this hourly neckline around $1755, the risks are skewed to the downside.
By Fawad Razaqzada on behalf of Forex.com
do watch out for a sharp correction in the metal, with oil and copper already falling sharply on Chinese demand concerns this week.
Gold had been able to hold its own relatively well so far, but as we warned in the previous post, a correction was likely.
On the one hand, it had been supported because of investors trying to price out the risks of further sharp rate increases in the US and lean towards the possibility of the Fed tilting to a more dovish stance amid expectations that inflation has peaked.
On the other hand, they will be keen not to take excessive risk after last week’s big up move and in light of fresh concerns over China, something which weighed heavily on some commodities this week. Also, the Fed is still hiking, which should limit the downside for the dollar.
With gold now breaking this hourly neckline around $1755, the risks are skewed to the downside.
By Fawad Razaqzada on behalf of Forex.com
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