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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Traders Can Look for a Low in Gold Prices

Gold prices failed to follow the price of stock markets higher but are now staging a rally. 

The $1,700 level was the key resistance for gold, and last week’s bottom has given the potential for a further rally. 

Gold – Weekly Chart

gold weekly chart

The critical event for gold will likely be Thursday’s US inflation report. If inflation ticks lower than expected, then markets will see an end to the aggressive Federal Reserve rate hikes. Gold could see a rally in the weeks ahead, with the first target being $1,800. 

The latest US inflation data comes after Federal Reserve Chair Jerome Powell said that rates “have a way to go” before reaching their peak. However, tomorrow’s data is expected to dip to 8% from 8.2%. 

The other issue for gold is the US midterm elections and if the results are delayed or there is contention. Gold can benefit as a political safe haven. Gold will also move depending on the spending plans that follow the election winners. 

The elections could leave the government split between Democrats and Republicans, which could be positive for stock markets and risk assets. A divided government would likely bring gridlock rather than significant spending policy changes. It has been the case in history that stocks have been more robust when a Democratic White House has shared power with a split or Republican Congress. 

Biden’s administration has been strict on higher taxes for the rich and an end to oil drilling, for example. Gridlock would actually be pro-business and could hurt the US dollar. 

Another bullish factor for gold was that central banks bought 400 metric tonnes of gold in the September quarter, according to World Gold Council data. That’s a record inflow and typically what they’d purchase over a year. 

Turkey added 95.5 tonnes to its gold holdings, while Egypt bought 44.8 tonnes. India was another big buyer with 40.5-tonnes. 

Investors can now turn their attention to the data on inflation, with anything under the 8% mark year-on-year being bullish. 

The US midterm elections may be delayed, but a shared government could reduce the fears over big government spending, or a Democrat win could reinforce them.

Last Updated: 09/11/2022

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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