GOLD Price Analysis – Dec 04, 2024
Daily Price Outlook
Gold (XAU/USD) continues to rise on Wednesday, pushing above the 2,650 level. The main driver behind this upward movement is the growing geopolitical tension, sparked by Israel's largest airstrike campaign since its truce with Lebanon.
This came in response to two rockets fired at Israeli-occupied territory by Hezbollah, the Iran-backed group. These developments have added pressure to the market, contributing to gold's positive momentum.
Looking forward, traders will keep their eyes on Fed Chair Jerome Powell’s speech later today and the US Nonfarm Payrolls (NFP) report on Friday. These events will give clues about the Federal Reserve's next move on interest rates.
Traders are waiting for this information before deciding on their next steps. This will also help determine where gold prices are headed in the short term.
US Dollar Weakness and Geopolitical Tensions Support Gold Prices Amid Fed Uncertainty
On the US front, the broad-based US dollar has faced pressure despite positive economic data. On the data front, the US Job Openings and Labor Turnover Survey (JOLTS) report showed job openings increased to 7.74 million in October, easing fears of a slowdown in the labor market.
However, the market is still focused on whether the Federal Reserve will cut rates soon. Despite solid labor market data, the market is pricing in a 70% chance of a 25-basis point rate cut at the Fed’s upcoming meeting in December, according to the CME Group's FedWatch Tool.
Fed officials have offered mixed views on the economy. San Francisco Fed President Mary Daly stated that the US economy is in a good place, with a balanced labor market not contributing to inflation.
Chicago Fed President Austan Goolsbee added that rates remain restrictive and may need to be lowered next year if inflation approaches the target.
Fed Governor Adrianna Kugler also noted that progress on inflation is ongoing, but decisions on monetary policy will be made on a meeting-by-meeting basis. This uncertainty about future rate cuts is keeping traders cautious.
Meanwhile, the US has imposed new export controls on China, aiming to curb its technological progress, particularly in semiconductor manufacturing.
These measures come after President-elect Donald Trump threatened to impose a 100% tariff on BRICS nations—Brazil, Russia, India, China, and South Africa—if they try to undermine the US dollar.
These actions, along with concerns over a potential trade war, are also impacting market sentiment. While the US dollar remains under pressure, gold prices are being supported by ongoing geopolitical tensions.
Therefore, the US dollar's weakness, coupled with geopolitical tensions and trade concerns, is supporting gold prices. Traders remain cautious, awaiting Fed decisions on rate cuts, which could influence gold's near-term trajectory as a safe-haven asset.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,648.94, up 0.19%, maintaining a bullish bias above its pivot point of $2,666.19. The immediate resistance at $2,686.65 remains a key level to watch, with further resistance at $2,704.46 suggesting potential upside targets.
On the downside, immediate support lies at $2,621.48, followed by $2,604.95 and $2,586.53, forming a strong support zone in case of retracement.
The Relative Strength Index (RSI) sits at 55, signaling neutral momentum but tilting toward a bullish outlook. The 50-day EMA at $2,643.97 aligns closely with the current price, reinforcing near-term support and indicating the uptrend is intact.
A decisive move above $2,666.19 could confirm further upward momentum, targeting $2,686.65 and beyond. Conversely, a break below $2,621.48 could expose the metal to sharper losses toward the $2,604.95 level.
Traders are closely monitoring the symmetrical triangle pattern, which suggests a breakout is imminent. Entry points above $2,640 could yield profits, with targets near $2,666, while a stop-loss at $2,625 offers downside protection.
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