1:49 PM · 19 October 2022

⬇Gold plunges over 1%

Gold fell more than 1%, while silver tumbled 1.5% during today’s session amid a stronger US dollar, which is the top performer among major currencies. The EURUSD pair fell over 0.8%  as US 10-year bond yields jumped above 4.1%. Recent statements from US bankers suggest that interest rates this year will reach 4.5%, which would mean increases of at least 125 basis points this year. However, many investors expect that since inflation remains elevated, the Fed will decide to increase by 75 basis points in November and in December. Moreover, the market is now expecting that FED will finish the tightening process in May or June when rates will reach 5.0% and theoretically a 40bp cut in the second half of next year. However, according to many Fed members, rate cuts next year are unlikely taking into account current inflation trends.

GOLD price approaches lowest level since April 2020. The 50.0% Fibonacci retrenchment of the upward wave from 2018 acts as nearest support. Source: xStation5

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