Gold Continuing to Drop After Yellen Confirms Interest Hike

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Gold Prices Drop as Fed Rate Hike Bets Firm Before Yellen Speech

  • Gold prices drop as US Dollar, Treasury bond yields rise
  • Testimony from Fed Chair Yellen might hurt gold further
  • Crude oil prices fall as OPEC, EIA shape output outlook

Gold prices fell as the US Dollar rose alongside Treasury bond yields and the projected 2020 rate hike path implied in Fed Funds futures steepened, undermining the appeal of non-interest-bearing and anti-fiat assets. The move may reflect pre-positioning ahead of much-anticipated Congressional testimony from Fed Chair Janet Yellen . The metal may suffer further if she hints that December’s projection for three increases in the baseline lending rate this year remains intact.

Crude oil prices retreated to the middle of their recent range after OPEC’s monthly report showed that Saudi Arabia overshot its obligations under the cartel’s supply cut accord, slashing production by the most in eight years. Rather than boosting prices, this seemed to tell investors that the supportive influence of output cuts might fade sooner than previously expected even as swing output swells. Indeed, the EIA projected March US shale-oil output to be the highest since May 2020. API weekly inventory flow data is on tap ahead.

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GOLD TECHNICAL ANALYSIS – Gold prices dropped to weekly low as sellers attempt to build momentum following the appearance of a Bearish Engulfing candlestick pattern. Near-term support remains at 1219.20, the 38.2% Fibonacci retracement, with a daily close below that exposing the 23.6% level at 1182.36. Alternatively, a push above the 50% Fib at 1248.98 targets the 61.8% retracement at 1278.76.

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSIS – Crude oil prices recoiled from seven-week range resistance at 53.86 once again. From here, a daily close below rising trend line support – now at – exposes the 38.2% Fibonacci retracement at 50.25. Alternatively, a breach above the range top targets the 55.21-65 area (January 3 high, 38.2% Fib expansion).

Chart created using TradingView

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Contact and follow Ilya on Twitter: @IlyaSpivak

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

Dollar surges, gold drops as Yellen signals rate hike possible this year, points to inflation

On Friday the dollar surged against the euro and the yen, and gold was lower after Federal Reserve Chair Janet Yellen signaled the possibility for a rate hike before the end of the year.

EUR/USD dropped 0.85% to trade at 1.1136, off the previous session’s highs of 1.1296.

USD/JPY rose to 120.69, up 0.53%.

Comex gold for December delivery were last down 0.81% at $1,144.50. The December contract ended Thursday’s session 1.97% higher at $1,153.80 an ounce.

In a speech at the University of Massachusetts, Amherst, Yellen said she expects inflation will return to 2% over the next few years as temporary factors currently holding it down will wane. Signs of weak growth overseas won’t prove large enough to have a significant impact on policy, Yellen said.

“Most FOMC participants, including myself, currently anticipate. an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter,” Yellen said.

Near the end of her remarks, Yellen faltered, losing her place and pausing several times before finishing. In a statement, the Fed said that the Fed Chairwoman was seen by EMT staff when she left the stage.

Most of her speech was devoted to reasons why she is confident that inflation won’t stay so low. A pivotal role, she said, is that the public expectations of inflation have held steady around 2% through recession and recovery.

“The fact that these survey measures appear to have remained anchored at about the same levels that prevailed prior to the recession suggests that, once the economy has returned to full employment, and absent any other shocks, core inflation should return to its pre-recession average level of about 2%,” Yellen said.

Drop Rates

This section highlights the average drop rates of the various items throughout all routes. All of these averages are without any +item effects. Highest drop rate for an item is displayed in bold. An enemy might drop multiple items when killed. The rate in below tables are percentage without bonus multiplier.

  • Note 1: Since July 19, 2020 averages are calculated with the drop of each monster, except for tokens.
  • Note 2: You must kill all Cricles in the Valley of Gold to get this average.
  • Note 3: Averages are not adjusted for the amount of time taken. To adjust the drop rate use the formula:
  • [Route (1) with longest time] / [Route (2) in same area with shorter time] * [Drop rate of item in route (2)].

Masked Enemies Edit

These enemies can be found in S-rank delivery quests in all areas or division quests.

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