On Tuesday (November 22), international gold prices rose as the U.S. dollar index fell. However, the gold price is still technically bearish in the short term, and the lower support is looking at $1,721. Around the possible adjustment of the Fed’s policy outlook, investors’ focus turned to the upcoming minutes of the Fed’s November meeting to look for clues about future interest rate hikes.
At 15:05 Beijing time, spot gold rose 0.19% to $1,741.06 an ounce; the main COMEX gold futures contract rose 0.15% to $1,742.2 an ounce; the U.S. dollar index fell 0.13% to 107.682.
The minutes of the Fed’s November meeting will be released at 3 o’clock Beijing time on Thursday (November 24). Most traders are betting that the Fed will raise interest rates by 50 basis points in December. A 75-basis-point hike is less than 25% likely after recent comments from Fed officials.
Stephen Innes, managing partner at SPI Asset Management, said: “With investors not expecting any new substantive information, the possible threat from the minutes is that the FOMC will play down any possibility of policy shifting from tightening to easing in a hawkish manner. . But overall, bets on more benign inflation should support gold investors’ bets on a recession in the first half of next year and the Fed’s eventual shift to rate cuts.”
Cleveland Fed President Loretta Mester said the central bank could lower interest rate hikes starting next month. Prior to this, Atlanta Fed President Bostic also opposed a further 75 basis point rate hike. These all challenge the dollar bulls and help gold strengthen.
Phillip Futures analyst Avtar Sandu said in a note that Mester’s dovish comments were a “relief for the gold bulls” and that the only factor that could push gold back below $1,700 was “an unexpected uptick in U.S. CPI.”
On the hourly chart, the price of gold fell below $1746, and the lower support looked at $1721 and $1701, which were the 23.6%, 38.2% and 50% Fibonacci retracement levels of the upward range of $1616-1786 respectively.