Gold defends key horizontal support

(Tomasz Wisniewski – Axiory Global Ltd.)

The appetite for commodities influenced by rumors from China that it will be ending its zero-Covid policy is helping Gold. And when we look at the chart, we can see that, boy, Gold really needed that help.

Gold is one step from a major trading signal. Which way will this trading signal go, well this is what we are about to find out.

This week was crucial as XAU defended the long-term bullish stronghold on the 1617 USD (yellow). For the third month in a row, buyers are using this level to initiate a correction, so far with success. It’s clear that the breakout of that level will mean a long-term sell signal. That’s scenario A.

If there is a support, there is always a resistance. XAU has two of them. The first one is a horizontal one on the 1680 USD/oz (orange) and the second one is the long-term down trendline (black). The breakout of those two will definitely be a great bullish sign, an invitation to a new up trend and our scenario B.

Which one will Gold choose?

Well, I always believe it’s not about guessing or predicting but more about reacting and following the move. In this case, the best option is to wait for the breakout and then jump in the right direction, once the price shows us its intentions.

Praying for ugly US jobs data [Video]

(Ipek Ozkardeskaya – Swissquote Bank Ltd)

Investors got the policy pivot they were looking for this week; unfortunately, not from the Federal Reserve (Fed), but from the Bank of England (BoE) instead.

In a confusing way, the Bank of England raised its interest rate by 75bp yesterday, but announced that the city analysts have got the BoE’s terminal rate wrong, and that the future rate hikes from the BoE will be softer, given that the economic situation is alarming. Sterling dived, while gilt yields were steady to lower.

Elsewhere, in an extended market reaction to Wednesday’s Fed decision, the US dollar gained across the board, as investors repositioned for a more aggressive Fed tightening.

The thing that could throw cold water on burning hot Fed expectations is soft jobs data from the US. That’s also the only thing that could save the rest of the world from the worsening Fed aggression: rapidly deteriorating economic conditions in the US.

Due today, the NFP is expected to reveal 200’000 new nonfarm jobs in October, for an average hourly pay rise steady around 0.3%.