Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

The vast majority of retail client accounts lose money when trading CFDs.

You should consider whether you can afford to take the high risk of losing your money.

Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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Gold (XAUUSD) Is Ready For A Price Dump

The gold price is in trouble after breaking the $1,700 level.

We warned this blog about the weak bounce at the $1,700 mark. The next major support in gold is at $1,400.

Daily XAUUSD Chart

Gold is suffering from the strength of the US dollar. Investors are looking for high-yielding assets as the world's most important central bank makes aggressive rate hike moves.

The gold price has been a key index because the $1,700 level provided support. When a market completes a price dump under a key level, then there is only fresh air below.

Markets are being pummelling this week by a blizzard of rate hikes by central banks. The Swedish Riksbank started the show with a surprise rate hike this week. That was coupled with a right-wing win in the election.

There was also data from the US Labour Department on Tuesday that said that the consumer price index rose 0.1% in August. The market has been recovering after remaining below change in July. Economists had expected consumer prices to fall 0.1%. On a year-on-year basis, consumer prices rose 8.3% in August. That was higher than the estimates of analysts.

According to Dennis Kisner of Bok Financial:

"Macro-economic pressures from the Federal Reserve set to raise interest rates this week have added pressure back on the US stock market, which seems to be capping crude prices," said Dennis Kissler, senior vice president at Bok Financial Securities. "Near term, prices are vulnerable to the Fed’s rate rises and more Strategic Petroleum Reserve releases scheduled through November."

Ahead of a swathe of central bank decisions throughout the week, Sweden's Riksbank took an aggressive approach to inflation as they hiked more than expected by 100bps, taking their interest rate to 1.75%.

The decision sparked fears of the Fed and others replicating it. Risk aversion abruptly entered the market as US futures started selling off to re-price in a higher rate hike by the Fed. The US dollar index bolstered the EUR back to parity.

Last Updated: 21/09/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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