Gold: Technical Indicators Suggest Further Fall Amid Hawkish Fed, Inflation
XAU/USD
+0.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
Gold
+0.16%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
Since I wrote my last analysis on September 27, gold experienced a significant downward trajectory. This decline can be attributed to deteriorating technical indicators, exacerbated by persistant inflationary pressures, which is pushing the Federal Reserve to maintain rates higher for longer. 
Gold Futures Weekly ChartThe so-called ‘Angle of Depression,’ which historically stood at 63 degrees, has taken a sharp turn, increasing to 80 degrees since mid-September, as revealed on the weekly chart.
Following a substantial gap-down in the gold December 2023 futures, the weekly candle for the current week indicates a potential continuation of the downward spiral. There appears to be little impetus for bearish sentiment to wane, especially as the gold December futures approach a critical support level: the 200-Day Moving Average, currently residing at $1818 on the weekly chart.
The decline in gold futures gained momentum following a sustained drop below the significant $1931 level on September 26th. This subsequent selling spree drove gold futures down to test the next support level at $1830 during today’s trading session.
This underscores the growing exhaustion among gold bulls, compounded by various factors ranging from the Federal Reserve’s statements to mounting uncertainty regarding the utility of gold as an investment, particularly as the dollar index sits at an 11-month high—a clear sign of escalating inflationary pressures.
As of October 3, 2023, despite the tug-of-war between gold bulls and bears, the prevailing uncertainty in the market may continue to exert pressure on December futures until their upcoming expiration date.
Indeed, the fate of December futures at expiry could prove decisive, especially if they remain below the 200-Day Moving Average on the weekly chart.
Gold Futures Daily Chart
On the daily chart, the weakness in gold futures has become strikingly apparent since the formation of a highly bearish crossover on September 27, 2023.
This crossover was marked by a sharp downward plunge in both the 9-Day Moving Average and the 18-Day Moving Average, both of which dipped below the critical 200-Day Moving Average. This development serves as a strong confirmation that the downward trend is likely to persist until the end of October 2023.
***
Disclaimer:
