Sumary of Gold Price Forecast: Struggling to Get Above 1800 – Levels for XAU/USD:
- It remains the case that until 1835 is overtaken, it’s difficult to have faith in any more upside potential in gold prices given recent technical developments.
- The fact of the matter is that, even as the US Dollar (via the DXY Index) remains broadly weaker from its highs at the end of August, Fed rate hike odds remain firm (pricing in 89-bps through the end of 2023) and the shape of the US Treasury yield curve (as measured by the 2s5s10s butterfly) suggests that tapering is arriving soon.
- Falling gold volatility and weak correlations suggests continued difficult trading may be ahead for gold prices.
- Bigger picture, failure to overcome the July highs – clearing the 1835 level discussed ad nauseum over the past six weeks – suggests that the pair has bearish technical inclinations in the near-term.