On Monday (October 3), the international gold price rose due to a weaker dollar, and the short-term price is still at $1,678. But the prospect of a continuation of the aggressive policy stance of global central banks capped gold’s gains. Investors focus on the US non-farm payrolls data to be released on Friday (October 7).
At 14:55 Beijing time, spot gold rose 0.05% to US$1,662.97 per ounce; the main COMEX gold futures contract sank 0.04% to US$1,671.4 per ounce; the US dollar index sank 0.06% to 112.140.
Yeap Jun Rong, market strategist at IG, said: “() The rally appears to be more of a correction due to oversold technicals, but there is no slack in the Fed’s tightening policy, which may suggest that any upside movement may usher in a sell-off.”
Fed Vice Chairman Brainard said on Friday (September 30) that she fully supports the Fed’s longer-term interest rate hike plan to curb inflation, and “the focus of monetary policy is to restore price stability in a high inflation environment.”
Last month, the Federal Reserve raised interest rates by 75 basis points for the third time in a row, and signaled that there will be more hikes this year. Meanwhile, euro zone inflation hit a record high last month, reinforcing expectations that the European Central Bank will continue to raise interest rates sharply this month.
Gold fell for a sixth straight month in September, its longest monthly loss in four years. Although gold is often seen as an inflation hedge, rising interest rates have increased the cost of holding gold, a non-yielding asset.
IG’s Yeap Jun Rong said: “Gold bulls may be happy with the dovish (non-farm payrolls) data in favor of a rebound in gold prices, but the continuation of the Fed’s aggressive hawkish policy still suggests that the overall downward trend in the gold market may remain unchanged.”
On the hourly chart, the price of gold has started an upward iii-wave trend from $1,641, with the upper resistance looking at the 76.4% target at $1,678 and the 85.4% target at $1,682. Wave iii is a sub-wave of the up (iv) wave that started at $1615. On the daily line, the price of gold is in a downward ((iii)) wave since $1808, and the (iv) wave is a sub-wave of the ((iii)) wave.