GOLD Price Analysis – Dec 17, 2024
Daily Price Outlook
Gold price (XAU/USD) was unable to break its consolidating range and remained stuck between slight gains and minor losses during the European session on Tuesday.
It is currently trading near 2,638 level close to the one-week low reached the previous day, as traders seemed hesitant and opted to wait for clearer signals on the Federal Reserve's (Fed) rate-cut plans before making new bets.
However, the reason can be linked to the ongoing expectations for a less dovish Fed, which continued to support higher US Treasury bond yields. This gave the US Dollar some strength and creating downward pressure on Gold.
On the flip side, ongoing geopolitical risks, particularly from the Russia-Ukraine war and Middle East tensions, still provided support to Gold as a safe-haven asset. Traders are now eyeing the US Retail Sales data later today for further market direction.
US Dollar Strengthens Amid Robust Economic Data and Fed Rate Speculation
On the US front, the broad-based US Dollar has been gaining strength due to recent data showing strong growth in the US economy. The S&P Global flash US Services PMI for December rose to its highest level in 38 months, jumping from 56.1 to 58.5.
Meanwhile, the Composite PMI increased to 56.6, a 33-month high. This solid economic performance, despite a dip in the Manufacturing PMI, has raised expectations that the Federal Reserve may not be as dovish as previously anticipated.
Traders are waiting for more clarity on the Fed's rate-cut plans, leading to a quieter, range-bound market ahead of the important FOMC policy decision on Wednesday.
Meanwhile, the US Dollar's rise has put pressure on non-yielding assets like Gold. Higher US Treasury bond yields are supporting the Dollar, while geopolitical risks, such as tensions with North Korea, Russia, and Yemen, are pushing investors toward safe-haven assets like Gold.
Despite this, markets are focusing on the upcoming US Retail Sales data and the Fed's meeting later this week for potential market-moving updates.
Investors are also keeping a close eye on the impact of US President-elect Donald Trump's policies, which could affect inflation and force the Fed to adjust its rate-cut cycle.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) remains under pressure, trading near $2,648.85, down 0.14% as bearish momentum dominates the session. On the 4-hour chart, Gold has slipped below the key pivot point at $2,654.36, indicating weak sentiment.
Immediate resistance stands at $2,672.93, where the 50-EMA sits slightly higher at $2,678.78, capping upside movement. A sustained push above this level could expose Gold to the next resistance levels at $2,690.55 and $2,707.78.
On the downside, immediate support holds firm at $2,634.28, with sellers eyeing the next critical levels at $2,617.80 and $2,601.58.
The Relative Strength Index (RSI) sits at 36, suggesting Gold is approaching oversold territory but still maintaining a bearish bias.
Technical indicators confirm downward pressure, as the price trades below both the pivot point and the 50-EMA, signaling strong seller control. If bears maintain momentum, a break below $2,634.28 could trigger a sharper decline.
However, any reversal above the $2,654.36 pivot would shift sentiment back in favor of the bulls, though immediate upside remains limited.
Conclusion: A Sell Stop entry at $2,647 is favored, targeting $2,634 as a take-profit level, with a stop-loss at $2,659 to mitigate risk.
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