- Gold prices closed at $1,759.85, after reaching a high of $1,768.95, and a low of $1,749.20.
- US Dollar Index, which measures the greenback’s value against a basket of six major currencies, rose to 94.07.
- The trade balance for August showed a deficit of -73.3B against the projected -70.5B, thus weighing on the US dollar.
It was another frustrating trading day for the gold market, as investors were more focused on short-term developments, like the gains in the greenback and Treasury Yields, while ignoring the unfolding energy crisis that is driving a negative growth narrative. On Tuesday, the US stock market saw a massive selloff, amid concerns about rising inflation, the energy crisis, fragile US -China trade ties, China’s Evergrande debt crisis and a stalemate over the US debt ceiling.
All the above-mentioned factors combined and dampened the risk appetite for equities, which prompted investors to find shelter in the US dollar. The rising prices of the greenback then weighed on the precious metal.
Furthermore, Federal Reserve Vice Chairman Randal Quarles said on Tuesday that US lenders and corporate borrowers need to speed up the pace of their switch from LIBOR to new reference rates. He also stated that after December 31, LIBOR might not be used in new financial contracts.
Gold price forecast: Is It Worth Placing a Buy Limit at $1,749?
Gold was trading at $1,756 per ounce on Tuesday, with a bearish bias. It is currently receiving immediate support at the 1,754 mark, which has been prolonged by an intraday pivot point. Gold has breached the pivot point support mark of 1,762, exposing it to the 1,754 support level.
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Daily Technical Levels
Pivot Point: 1,759.33