Gold price advanced on Tuesday as US Treasury bond yields retreated, limiting gains for the US Dollar. The economic docket was light, featuring the release of the New York Empire State Manufacturing Index and the NY Fed Consumers Expectations Survey.
The New York Fed’s Empire State Manufacturing Index for September posted a weak figure. Meanwhile, inflation expectations were upwardly revised for the month, as reported in the latest NY Fed Consumers Expectations Survey.
The yield on the US 10-year Treasury note fell by eight basis points (bps) to 4.03%, making the non-yielding metal more attractive while signaling increased demand for US Treasury bonds.
Bullion prices extended their gains after bouncing off the daily low, although the US Dollar remained firm. The US Dollar Index (DXY), which measures the Greenback’s strength against a basket of six major currencies, remained steady at 103.25.
In other developments, Federal Reserve (Fed) officials continued to draw attention. San Francisco Fed President Mary Daly noted that the Fed’s dual mandate risks are now balanced, adding that the labor market is not contributing to inflation. She expressed cautious optimism about the economic outlook and mentioned the possibility of one or two rate cuts “if forecasts are met.”
Gold tends to perform well during periods of geopolitical risk. In recent developments, Israel announced plans to target military installations in retaliation against Iran and Hezbollah following the October 1 missile strike.
Looking ahead, the market’s focus shifts to upcoming US Retail Sales, Industrial Production data, and Initial Jobless Claims, which are due later this week.
Technical Outlook – Gold Price
Gold price recorded a 0.41% gain, closing near a record high of 76,360, compared to the previous day’s close of 76,045. After breaking through the key resistance level of 75,450, prices reached 76,488.
The outlook shared last Monday, targeting the 75,800-76,200 range, was successfully achieved.
Since the beginning of the month, gold prices have struggled to break the significant resistance level of 76,620, forming a cluster of indecisive candlestick patterns. Additionally, the Relative Strength Index (RSI) is showing signs of negative divergence, moving in the opposite direction of the price trend.
These technical factors indicate a potential trend reversal, with prices likely to retrace towards the immediate support zone of 75,900-75,550 in the near term. On the upside, only a fresh breakout above 76,620 would signal a continuation of the uptrend, potentially targeting new highs in the range of 77,200-77,800.
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Commodity Samachar Securities
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