Gold And Silver Prices Today On June 10
Gold Price Forecast: Gold prices consolidated near $3950 per ounce on Tuesday, November 3 as rising hopes of a US-Iran deal, lower crude oil prices, and a weaker US dollar provided support. However, confusion surrounding Federal Reserve policy capped any gains.
Spot gold prices rose slightly in early Asian trade on Tuesday after rising almost 2% on Monday. However, investors are now looking for direction from developments in the Middle East, US mid-term elections and economic data. As such any bullish momentum remains limited.
Spot gold prices traded around $3950 per ounce in early Asian trade on November 3 after rebounding from recent lows. Gold had faced heavy selling pressure last week.
On Monday, spot gold rose by around 2.1% to hit $3954.41 per ounce, while US gold futures also rose. This followed lower crude oil prices and a weaker dollar. ”
Washington, Tehran and Qatari mediators have played an important role in influencing global markets.
Iran has said talks are continuing and has suggested progress can be made to re-open the Strait of Hormuz. The strait plays an important role in transporting oil around the world.
This provided support to gold prices on Monday as oil prices fell on the hope of reduced tensions. This reduced fears of longer-term supply issues which would cause inflation to rise and therefore force central banks to hold or increase interest rates.
There is however, no confirmation a deal has been reached. Reports surfaced on Tuesday that the US conducted new strikes on Iranian targets in the Strait of Hormuz.
The Federal Reserve continues to play an important role in influencing gold prices.
The US central bank left rates unchanged at 3.75-4.00% during its October meeting. However, concerns over inflation have meant traders are keeping an eye out for the potential of another rate increase in December.
According to Reuters on November 2, markets currently expect there to be a 77% chance of a rate hike in December. However, this will fluctuate depending on new economic data.
Generally, higher rates hurt gold prices as investors can earn better returns from interest-bearing assets. However, if yields fall and monetary policy becomes looser gold can become an attractive option.
As such, traders are monitoring US economic data, including employment and business activity.
While the rebound in gold has boosted sentiment in the short term, technicals suggest confirmation is needed.
According to FXStreet technical analysis, gold faces key resistance at the $3,950-$4,000 level. If gold can break through this level and consolidate above it, this could boost the bullish momentum. However, if selling resumes then recent lows could come back into play.
Key levels:
If gold breaks decisively above $4,000 could improve the near-term outlook, although additional resistance may emerge around $4,089 then this could boost momentum. However, if gold falls below $3,870 then this could leave it open to further losses.
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