Returned stability after heavy decline in gold prices:
On Wednesday, gold prices found a light recovery view, when the bullion was over $4,040 per ounce after the last business session came heavily sold. Investors are now assessing the upcoming policy decisions after strict statements on interest rates on the part of the US inflation and the Federal Reserve authorities
Spot gold during business (Spot Gold) reached $4,041.67 per ounce with an edge of 0.22%, while US Gold futures recorded a speed of 0.48%. Silver 1.6% in precious metals climbed $52.3730 per ounce. Also in the spot platinum strengthened 1.7%, palladium rose 1.7% to $1,044.25 and palladium futures reached $1,039.25 with an edge of 1.5%. Meanwhile the US dollar index also marginally increased by 0.02% to 102.27 levels
Pressure of inflation statistics and strict policy of fed:
AFTER MUCH STRONGER THAN THE EXPECTATION OF U.S. CONSUMER PRICE INDEX (CPI) DATA OF THE MONTH OF OCTOBER, THERE WAS A CONSTANT PRESSURE ON GOLD, LEADING TO A DECLINE OF 2.6%. THESE DATA FROM THE INFLATION PUSHED THE US TREASURY YIELDS UP IN ALL PERIODS AND BOUNCED INTO THE DOLLAR INDEX, AS INVESTORS HAVE STARTED REASSESSING THE OUTLOOK OF INTEREST RATES
traders are now standardized by the federal reserve in december’s meeting to increase 25 bases point interest rates. growing borrowing costs and high interest rates are always damaging for gold without giving interest, since the opportunity to hold the gold increases the cost (opportunity cost). as well as the strong dollar makes gold expensive for non-us buyers
Aggressive Statement of Fed Officers:
The strict stance of the officers of the Federal Reserve gave further air to the pressure of the sale. The Dallas Fed’s president Lorry Logan said he believes that the central bank has to increase and increase at least 50 bases points in rates, and this increase can be much faster than the slow speed adopted in recent months
The Fed Governor Christopher Waler has also raised the possibility of a large rate rise of 50 bases point at the December meeting. These statements have deepened the concern in the market that policy makers can adopt more aggressive stances to overcome the inflation
Findings for Gold traders:
The current time for gold investors is quite cautious. As long as the monetary policy of the Federal Reserve is completely cleaned, gold prices will continue to fluctuate. If the dollar and bond persists in the Yield, then the pressure on the gold can rise again, so traders should follow the strict stop-loss before any new position