Declines For Sixth Session -Chart

(MENAFN- Daily Forex)

Gold prices fell for the sixth consecutive session to below $2,606 per ounce on Wednesday, the lowest level in about three weeks, under pressure from the strength of the US dollar as traders bet that the US federal Reserve will not act quickly to cut interest rates as previously thought.

The minutes of the Federal Open market Committee’s (FOMC) September meeting showed that Fed policymakers were divided on the size of interest rate cuts, with some participants favouring a quarter-point cut instead of a 50-basis-point cut.

Currently, investors are pricing in a 78% chance of a quarter-point cut in November. In addition, gold prices have also been pressured by vague announcements from China regarding stimulus measures. However, gold’s appeal as a safe-haven asset remains amid looming concerns about conflicts in the Middle East.According to Forex trading, the dollar is at its highest level in almost two months. The US Dollar Index (DXY) rose for an eighth straight session and topped 102.9 on Wednesday, its highest level since mid-August, as traders bet that the Federal Reserve will deliver a smaller 25 basis point cut in the federal funds rate in November. The minutes from the last OFMC meeting in September showed that policymakers were divided on the size of the rate cut, with some participants favouring a quarter-point cut rather than a 50-basis point cut. Also, the minutes reinforced the Fed’s view that a half-point should not be taken as a signal of a less favourable economic outlook or that the pace of policy easing will be faster going forward.Now, traders are awaiting US CPI and PPI data due this week to gauge how price pressures in the economy are evolving. The odds of a 25-basis point cut in the federal funds rate are currently around 78%. Based on the performance, the US dollar strengthened against major currencies, especially the yen and the euro.Another factor affecting the gold market, the yield on the 10-year US Treasury notes which rose to a two-month high. The yield on the 10-year US Treasury note rose above 4.05% on Wednesday, its highest level in more than two months, as minutes from the Federal Open Market Committee’s latest rate-setting meeting showed policymakers divided over how much the central bank should cut interest rates. Ultimately, the central bank opted for a more aggressive 50 basis point rate cut to address evidence of a slowing Labor market, despite calls for more assurance that inflation is nearing its target. The calls for a slower rate cut were in line with an unexpected rise in nonfarm payrolls and a surprise drop in the unemployment rate since the Fed’s September meeting, bolstering bets that the central bank will not have to deliver more aggressive rate cuts.According to stock trading platforms. US stocks hit a 12-week high. The S&P 500 and Dow Jones both hit record highs on Wednesday, rising 0.7% and 1%, respectively, while the Nasdaq rose 0.6%. Investors assessed the latest minutes from the Federal Reserve and prepared for key inflation data. The minutes from the Fed’s September meeting showed a“substantial majority” of officials backed a 50-basis point rate cut, but left future cuts uncertain, prompting some traders to raise the odds the Fed will keep rates steady in November to 21%.Tech giant stocks such as Apple (1.7%), Amazon (1.4%), and Microsoft (0.7%) led the market higher. The rise helped offset concerns about Alphabet, whose shares fell 1.5% after the US Justice Department indicated it could ask a judge to force Google to divest major businesses, including the Chrome browser and Android operating system, to address its search monopoly.Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Gold Price Analysis and Forecast Today:According to today’s gold analysts’ expectations. All the selling operations that happened did not lead to breaking the upward trend of gold prices as is clear on the daily chart below. For this to happen, the bears must move gold prices to the support levels of $2555 and $2520 per ounce, respectively. As we mentioned before, global geopolitical tensions and the abandonment of tightening by global central banks will remain strong factors for gold prices for a period of time. Consequently, any decline in prices will remain a target for new buying.Ready to trade our gold daily analysis and predictions? We’ve made a list of the best Gold trading platforms worth trading with.

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