Gold declines moderately in early trading
FXStreet analyst sees dollar selling, gold pushing higher if Brainard gets Fed nod
(USAGOLD – 11/10/2021) – Gold declined moderately this morning in advance of the consumer inflation report due shortly. It is down $6 at $1827.50. Silver is down 9¢ at $24.28. For the past few months, the reappointment of Fed Chair Powell has been a foregone conclusion. Over the past several days, though, political crystal ball gazers have elevated Fed governor Lael Brainard’s status to that of legitimate contender. Yesterday FXStreet’s Justin McQueen speculated on what a Brainard chairmanship might mean for the gold market.
“[G]iven that Brainard is considered to be more dovish than the already dovish Chair Powell,” he wrote, “should Brainard be confirmed as the next Fed Chair, the initial reaction is likely to be one of US dollar selling, alongside US treasuries and gold pushing higher, particularly given that bookmakers remain heavily in favour of Powell being renominated.” As for the price of gold, McQueen says that it is “back at familiar resistance at $1833, which marks the 61.8% Fibonacci retracement of the $1450-2071 range. The level also coincides with the trendline stemming from all-time high, increasing the significance of the area, which has rejected gold topside on several occasions from July. Therefore, a close above would be a significant development for bulls and open the doors to $1860-75.”
Chart note: In 2020, silver recorded its best percentage gain in a decade – 46.3% – and posted its third-largest gain over the 20 year period. It has posted gains – sometimes significant – in twelve of the last twenty years. So far in 2021, silver is down about 11.5%.