📝 Weekly gold
This year, stocks down around 20%, the Dollar index is at higher highs of 112.17 since 2002, and US10Y is at a higher value than 10 years ago.
Traders invest in Gold to protect their assets from inflations but now, all the headlines talk about recession.
Rising bond yields, the Central bank’s Interest rate Hikes, and the strength of the US dollar were the most important pressure, and bearish drivers, for gold and stocks in the third quarter.
But, the last week, With high inflation in the world, which requires a Hawkish monetary policy, the British central bank (BOE) began to collect and buy bonds!!
The action of the British central bank, unlike the other bank’s hawkish policies, surprised everyone and created strange turbulences in the currency market and supports stocks.
Now, Whats the point?
◽️ Traders will keep eyes on global bond markets for next week because if the Bank of England’s strange policies continue, it could help gold to rise
while the Bank of Japan, which is concerned about high prices in USDJPY, should intervene in the forex market. In addition to buying yen, they can sell US bonds in the markets and witness fluctuations in bond yields.
◽️ The risk of the economic recession is the driver of the rise of gold. But in the short term, the attention of all traders is on contractionary policies and decisions of central banks, which can put pressure on gold.
As we told you in last week’s analysis, any upside movement in gold will be short-term and provide a selling opportunity.
Because the US dollar is in the overbought zone and also the bonds are at their highest points, the take profits have the possibility of raising the price of the gold.
On the other hand, due to the hawkish policies of the central banks as well as the US central bank, this pressure on gold will not be removed
and as long as we observe the rotation of the monetary policies of the central banks, we cannot expect a stable rise for gold.
◽️ The world’s largest bond market has fluctuated strongly in the last week due to the fear of the British debt crisis.
But, with the intervention of the BOE and the introduction of the government bond purchase program, the treasury bonds’ price fall was compensated.
The trend changed as the Bank of England intervened in the bond market and it lowered the yield of American bonds.
Now, in addition to the policies of the Federal Reserve, other central banks also affect bonds and we have to care about them.
For this week in the American economic calendar, we have mixed data.
The forecast for ISM PMI is 52.2 and ISM PMI 56 and both of them decreased
Aug Job openings forecast a decrease in employment, but ADP nonfarm Employment changes show an increase.
The jobless claims index is more than the previous number and NFP payrolls decreased.
🔻 As we said in the analysis, gold is bearish in the medium and long term until we see a turn in the contractionary policies of the central banks
But this week due to the upcoming economic data and the possibility of correction of the US dollar index and US bond yields, there is a possibility of gold increase.
However, we predict a turbulent week and our suggestion to traders is to wait this week and sell gold from the high points.
🔻 $1700 to $1724 is our sightly range to looking the short opportunity to the$1620 area