On Monday, XAU/USD lost 0.54% and remained near $4,140, and in the Asian session on Tuesday it dipped to $4,135. For almost three weeks, the metal has been locked in a range of $4,063.55 - $4,227.53: sellers are consistently found at $4,200, buyers at $4,100.
The yield on 10-year US Treasuries rose by about 6 basis points (0.06 percentage points) to 5.144%, although a week earlier it had fallen by 16.5 points to 5.07%. The higher the bond yield, the more expensive it is to hold gold: it pays no interest. Oil is pushing rates higher - WTI has gained almost 15% from its low of $86.32 and is trading at $98-99, and expensive energy brings the inflation conversation back.
In September, the Fed raised the rate by 25 basis points. According to Prime Terminal, the probability of a hike in October has been cut to 16%, while for December the market already gives 92%. The Fed is currently in its blackout period before the meeting, and there will be no public speeches. Kevin Hassett, the White House economic adviser, said on Ethereum CNBC that inflation "still needs work."
The nearest resistance is the 20-day moving average at $4,186.57, the RSI is at 43.66, below the midpoint but not in oversold territory. Support remains at $4,100 and the October 14 low of $4,073. Geopolitics is not being discounted: Mohsen Rezaei, secretary of Iran's Supreme National Security Council, promised a new plan for responding to possible US and Israeli strikes. Among the statistics this week are employment data and PMI business activity indices, the dollar is holding below 102 on the DXY, and silver is at $57.50.
Been chopping around this range for three weeks?
A hundred-dollar range in gold is worked by hand by everyone sitting in it. With just a couple thousand on deposit, the path from $4,100 to $4,200 is a couple of dinners, even though the idea was right. It all comes down to the notional size of the position, not the chart markup. Prop trading is access to the company's account: you pass the evaluation and trade its capital within its risk limits. It makes sense to understand the mechanics before the range finally breaks.