Gold (XAU/USD) Analysis, Prices, and Charts
- US Treasury yields are subdued and a mild risk-on sentiment prevails.
- Central bank policy decisions may change the landscape.
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Gold is treading water in early trade with little fresh news to drive price action. Risk markets are trying to push higher, despite the ongoing crisis in the Middle East, as the US earnings season gets into full flow. Tuesday’s US S&P flash composite index surprised to the upside, indicating that business activity in the US is expanding, adding to the growing feeling that the US economy may be lining up a soft landing in the months ahead.
US Treasury yields are flat to a touch higher today in slow trade as traders wait for next week’s FOMC meeting and policy decision. The Fed is fully expected to keep rates unchanged, while the post-decision press conference will be parsed closely for any indications that the Fed may be ending its rate hiking cycle. The first look at US Q3 GDP is released tomorrow and this will be part of the Fed’s thinking when looking at monetary policy. The market is currently expecting 4.3% q/q growth in the third quarter, markedly stronger than the 2.1% expansion seen in the prior quarter.
The Federal Reserve is not the only central bank on the slate with the ECB, BoC, BoE, and BoJ all announcing their latest policy decisions over the next eight days.
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Gold is currently trading on either side of $1,970/oz. ahead of the US GDP data and next week’s Fed decision. A short-term resistance level around $1,987/oz. remains intact and the precious metal needs to close and open above here to open the way to $2,000/oz. and $2,010/oz. Support is seen at $1,960/oz. ahead of a zone between $1,940/oz. and $1,932.5/oz.
Gold Daily Price Chart – October 25, 2023
Chart via TradingView
IG Retail Trader data shows 61.04% of traders are net-long with the ratio of traders long to short at 1.57 to 1.The number of traders net-long is 5.55% lower than yesterday and 18.08% lower from last week, while the number of traders net-short is 2.64% higher than yesterday and 37.42% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.
| Change in | Longs | Shorts | OI |
| Daily | -5% | 5% | -1% |
| Weekly | -21% | 32% | -5% |
What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
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