GOLD Price Analysis – Dec 02, 2024
Daily Price Outlook
Gold (XAU/USD) remains under pressure, hovering around the 2,630 level, with an intra-day low of 2,621 on Monday.
However, the reason for this decline is the recent rebound in the US Dollar, fueled by rising expectations that US President-elect Donald Trump's tariff plans could trigger inflationary pressures.
This, in turn, reduces the likelihood of near-term Federal Reserve (Fed) interest rate cuts. Therefore, the stronger dollar, along with rising US Treasury bond yields, has pushed gold lower.
US Dollar Strength and Geopolitical Tensions Impact Gold Prices
On the US front, the US dollar has regained strength after hitting its lowest point since November 12, driven by rising US Treasury bond yields.
This has put pressure on gold, as the stronger dollar reduces the appeal of gold priced in USD. Furthermore, Trump’s tariff plans, particularly targeting BRICS nations, are fueling concerns that they could ignite a trade war and push inflation higher, reducing the likelihood of Fed rate cuts.
In addition to the economic outlook, the increasing geopolitical tensions continue to support gold’s safe-haven demand.
However, the ongoing Russia-Ukraine war remains unresolved, and recent airstrikes by Russian and Syrian jets on Syrian rebels have intensified tensions in the region.
These events contribute to investor uncertainty, supporting demand for gold as a store of value during times of global instability.
China’s Manufacturing Improvement and Key US Economic Data Could Impact Gold Prices
In Asia, China’s manufacturing sector showed signs of improvement. The official Manufacturing PMI rose slightly to 50.3 in November, while the Caixin PMI surged to 51.5, suggesting stronger private-sector expansion.
Investors hope that China may introduce additional stimulus measures to support economic growth, which could influence global market sentiment.
Looking ahead, market participants will be watching key US economic data, particularly the ISM Manufacturing PMI and the upcoming Nonfarm Payrolls (NFP) report.
These data points could provide clues about the Fed's future actions, which will directly impact both the US dollar and gold prices.
If the data suggests a stronger economy, the Fed may be less likely to cut rates, which would likely strengthen the USD further, putting more pressure on gold.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues its downward trajectory, trading at $2,625.41, down 0.92% on the day. The metal struggles to regain its footing as bearish sentiment dominates, with the price hovering below the critical pivot point at $2,645.48.
Immediate resistance is located at $2,655.31, with further hurdles at $2,669.37 and $2,686.59. A breakout above these levels could signal a short-term recovery; however, the 50-day EMA at $2,639.84 reinforces resistance, adding to the downward pressure.
On the downside, immediate support rests at $2,624.17, followed by deeper levels at $2,604.95 and $2,590.40. A sustained break below $2,624.17 could lead to further declines, targeting the next critical support at $2,590.40. The RSI at 38 reflects bearish momentum, signaling oversold conditions but with room for additional downside unless buyers step in.
The broader outlook remains cautious, as gold’s inability to reclaim the pivot point indicates ongoing bearish sentiment. Traders should watch for a decisive move above $2,645 to confirm bullish potential. Otherwise, failure to hold above immediate support could invite additional selling pressure.
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