FX.co ★ XAU/USD, GOLD

Following yesterday's 2.6% decline, which completely erased the rally to $4,122, gold is now trading at around $4,060 per ounce. After falling 3.5% the day before, silver increased 1% to $52.06; palladium and platinum were marginally higher. The sell-off was prompted by the inflation data from October. For the third consecutive month, the headline increased 0.4% compared to a 0.3% projection, while the core consumer-price index up 0.3% month over month against a 0.2% forecast. With a core print of 0.3%, Christopher Waller is ready to contemplate a 50-basis-point step, and the outcome fell precisely on the threshold he had identified the day before. On November 9, the likelihood of a December rise increased from 78.8% to 96.3%. Since gold has no dividend, higher interest rates and yields make bonds more appealing, while a stronger dollar makes the metal more costly for the majority of buyers. The impact was magnified by Federal Reserve officials. The study was described by Austan Goolsbee as "worrying, on the verge of alarming." "We have a real problem with inflation," Chicago Fed President Goolsbee said. He permitted an increase or a halt in October, and on November 9 he likened AI-driven investment to excessive demand. Dallas Fed President Loretta Mester continues to believe that at least two 25-bp rises are necessary, maybe at a faster rate. Waller currently permits 50 basis points. In early September, he was prepared to keep rates if inflation increased. The metal is being affected by the change in tone from waiting to accelerating. This time, cheap oil did not rescue gold. As the currency dropped and Brent declined on Monday, the metal increased and it seemed that reduced energy costs would boost demand. The October CPI still shows a nearly 12% monthly increase in Brent, so the impact of lower oil will only be seen in November's figures, even though Brent is already below $92 and WTI is around $84. There is some support for gold, but not much. Although the metal already fell below the $4,000 threshold on November 3–4, it is still the primary floor. Support comes from safe-haven demand and central-bank purchases. Interestingly, compared to the end of October, when gold was sold to cover stock losses, this time the equities correction did not cause it to decline as dramatically. This suggests that gold is no longer a source of liquidity. It is trading as a rate-sensitive asset once again. In the next sessions, I think the pressure on gold will continue. It will be difficult for the metal to hold above $4,100 as the Fed gets ready for a December 9 raise and permits a 50-bp step, and the dollar and rates stay close to yesterday's levels. A test of $4,000 is more plausible, and if it drops below that, the next target is the November 4 low around $3,942. I attribute a significant reversal to Friday's PPI, although central banks and more oil decreases may mitigate the decline: Gold may be able to recover some of its losses if the producer-price data is milder.

Gold's (GOLD) four-hour (H4) chart shows a significant change in price momentum. The price has dropped more quickly from earlier highs close to the upper resistance zones, and it is now trading around 3938.04. It has now positioned itself close to vital levels, only steps away from testing lower weekly support levels, after breaking through important technical midlines and limits. Price Channel Structure: After a significant upward spike, the price has been moving inside a wide, major ascending channel (seen in blue). But a downward breakout from a steeper secondary ascending channel (seen in pink/red) has resulted from recent pullbacks. As the price now seeks to stabilise close to the lower border of the major channel, this bearish breakout clearly indicates a fading of purchasing momentum and an increase in short-term selling pressure. Weekly Pivot Level Interaction: After failing to hold above important resistance levels, including the weekly pivot point at 4031.21 and higher resistance levels like the first weekly resistance (Weekly R1) at 4186.20, the price was under tremendous downward pressure. The price broke below the weekly pivot point after this reversal, and it is now trading below it as it approaches the first weekly support level (Weekly S1) at 3916.04. crucial levels of resistance and support. On the daily period, the price is now trading at 3938.04 inside a declining channel. After failing to maintain its position above the first monthly resistance level (Monthly R1) at 4110.09, it has dropped, dropping down below the monthly pivot point of 3989.91. Yesterday's Candle: After a downward reversal from the upper border of the descending channel, selling pressure and a decrease drove the price back toward the monthly pivot point. Today's Candle: Shows that the bears are clearly in control as the price breaks below the monthly pivot point to settle at 3938.04, indicating a continuation of the negative trend.