FxWirePro- Gold Weekly Outlook

Ichimoku Analysis (Weekly chart)

Tenken-Sen- $1680.27

Kijun-Sen- $1767.44

Gold is trading weak and holds below $1650 ahead of Fed monetary policy. The European central bank and Bank of Canada raised by 75 bpbs and 50 bpbs respectively. Markets eye US Fed monetary policy and US Non-farm payrolls data for further direction. Any hawkish rate hike by Fed will drag the yellow metal further lower. The yellow metal hits a low of  $1638.12 and is currently trading around $1644.04.

US GDP grew at an annual rate of 2.6% in Q3 compared to a forecast of 2.3%. US core PCE rose 0.5% in Sep, in line with the estimate of 0.50%. The number of people who have filed for unemployment benefits increased by 3000 to 217000 in the week ended Oct 22, compared to an estimate of 219K.

 The US 10-year yield recovered nearly 4% after hitting a low of 3.91%. The US 10 and 2-year spread widened to -42 basis points from 23.9- bpbs.

 According to the CME Fed watch tool, the probability of a 75 bpbs rate hike in Nov dropped to 83.70% from 95% a week ago.

Factors to watch for gold price action-

 Global stock market- Bullish (Negative for gold)

US dollar index – Mixed  (Neutral for gold)

US10-year bond yield- Mixed (Neutral for gold)

Technical:

The near–term support is around $1654, a close below targets of $1638/$1630/1620. The yellow metal faces minor resistance around $1675, the breach above will take it to the next level of $1685/ $1700/$1720/$1740/1760/$1800. Minor bullish continuation only if it breaks $1740.

 It is good to sell on rallies around $1668-70 with SL around $1685 for TP of $1600.