Gold XAUUSD Holds Near $3,900 as Fed Hike Bets Hit 91.7%
Gold tried to settle above $3,900 an ounce while silver slipped toward $49.00 and platinum stayed under $1,500. Traders now see a 91.7% chance of a Fed rate hike in December, and the dollar tested yearly highs, according to independent trader Vladimir.
Gold (XAUUSD) tried to settle above $3,900 an ounce in the latest session, while silver pulled back toward $49.00 and platinum stayed below $1,500. A strong U.S. dollar and bets on higher interest rates weighed on all three precious metals.
The dollar tested yearly highs. Traders remain focused on a more hawkish outlook for Fed policy, according to independent trader Vladimir. Some buyers stepped in on the dip in gold.
Rate-hike bets build
The FedWatch Tool indicates a 91.7% probability that the Fed raises the federal funds rate by 25 basis points in December. A basis point is one hundredth of a percentage point. Traders also expect a further 25-basis-point hike in January.
Rising rates are bearish for gold because it pays no interest.
Treasury yields moved lower as some traders bought U.S. bonds after a strong sell-off. The 2-year yield declined toward 4.85%, and the 10-year yield settled near 5.13%. The move did not have a material impact on gold, Vladimir said.
A softer producer price report gave the metal no support either. The producer price index, a measure of what businesses pay at the wholesale level, rose 0.3% month over month in October against an analyst forecast of 0.4%. Core PPI also grew 0.3%, in line with estimates.
Gold, silver and platinum levels
Gold remains stuck near support at $3,890 to $3,910. A drop below $3,890 would point toward the next support at $3,780 to $3,800. The RSI, a momentum gauge, sits in moderate territory, leaving room to gain momentum if the right catalysts emerge.
On the upside, a move above $3,920 would push gold toward resistance at $4,000 to $4,020. A settle above $4,020 would head toward $4,100.
Silver lost ground as the gold-to-silver ratio climbed above 79. The ratio shows how many ounces of silver equal one ounce of gold. If it settles above 79.00, it could head toward 80.00, which would be bearish for silver.
Demand for risk assets fell as U.S. equity markets pulled back. Nvidia's problems continued to pressure the Nasdaq index, which may affect global markets, Vladimir said.
Silver slipped below the psychologically important $50.00 level and is trying to settle under $49.00. Success there would bring support at $47.00 to $48.00 into view. A move back above $50.00 would target resistance at $51.00 to $52.00, and a successful test of that zone would open the way to $54.00.
Platinum kept moving lower as its pullback continued. Palladium rose 1.5%, but that gave platinum no support.
The nearest platinum support lies at $1,440 to $1,460. A break below $1,440 would push it toward recent lows at $1,360 to $1,380. A move above $1,500 would open the way to resistance at $1,520 to $1,540, and a break past $1,540 would head toward $1,600.
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