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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Gold extends decline on renewed US rate hike speculation

Article By: ,  Financial Analyst
October 29, 2015 7:28 PM

Prior to Wednesday’s FOMC statement from the US Federal Reserve, the price of gold had surged to an intraday high of $1182, perhaps in anticipation of unchanged interest rates and continuing dovishness from the Fed. While there indeed was no rate hike, the statement that was released was perceived as being on the hawkish side, prompting the precious metal to make a complete reversal to the downside and pushing up the US dollar against most other major currencies.

As of Thursday afternoon, while the dollar has consolidated its gains from the prior day and made a modest pullback, gold has significantly extended its losses from Wednesday to hit a low around $1145 on Thursday, establishing nearly a three-week low.

For the past two weeks, the price of gold has been in a sharp retreat from its mid-October high of $1191. That high also represented the upper resistance border of a rising trend channel that extends back to July’s multi-year low of $1077.

 

Having already dropped decisively below its 200-day moving average on renewed speculation over a possible December rate hike by the Fed, gold could well have further to fall, especially if economic data in the upcoming weeks are seen to support a sooner rate hike.

Now approaching its 50-day moving average and the $1142 support level to the downside, the price of gold could extend its fall back down towards the lower support border of the noted rising trend channel on any further bearish momentum. Currently, that level is around the $1125 area. Further to the downside, on any subsequent breakdown of the trend channel, is a key support level at $1100. To the upside, the $1170 area remains a major resistance level.

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