GOLD Price Analysis – Nov 12, 2024
Daily Price Outlook
Gold price (XAU/USD) unable to stop its bearish trend and drew some further offers around $2,606 marks. However, the US dollar bullish bias, backed by the growing optimism around Donald Trump's expected economic policies, is weighing on gold.
Meanwhile, the higher US Treasury bond yields, fueled by expectations that Trump's tariffs and corporate tax cuts could push inflation higher, are adding further pressure on yellow metal.
On the other hand, the ongoing worries that Trump's protectionist policies could lead to a trade war and harm the global economy are giving gold some support, as it is considered a safe haven.
Traders are also likely to stay cautious and avoid making bold moves ahead of this week’s US consumer inflation data release. In addition, speeches from several key Federal Reserve officials, including Fed Chair Jerome Powell, will be closely watched for insights on the future of interest rates.
Gold Prices Struggle as US Dollar Strengthens and Inflation Risks Rise
However, the losses in gold come from the strengthening US Dollar, which has been gaining momentum after the US election results confirmed Trump’s victory.
Analysts believe that if Trump’s policies, especially those related to fiscal spending and investment, are implemented, they could raise inflation risks.
This might lead the Federal Reserve (Fed) to adopt stricter monetary policies, which would further support the US Dollar and put pressure on the yellow-metal.
Traders are eagerly awaiting US inflation data, which will be released on Wednesday. The Consumer Price Index (CPI) is expected to show a 2.6% year-over-year rise for October, while core CPI, which excludes food and energy, is projected to increase by 3.3%.
Fed officials, including Neel Kashkari, have emphasized that the US economy remains resilient, but the Fed is still focused on lowering inflation to its 2% target. Kashkari mentioned that more evidence is needed before considering another rate cut.
Morgan Stanley’s report also pointed out that Trump's key macroeconomic policies, such as tariffs, immigration, and fiscal measures, could have a significant impact.
Looking forward, traders are waiting for speeches from key Federal Reserve officials, including Chairman Jerome Powell, to get clues about interest rates. Investors are also paying attention to upcoming data, like US inflation numbers and the Producer Price Index, as these could affect the next move in gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold prices are currently trading at $2,604.68, down 0.61%, as the precious metal continues to face bearish pressures amid a strong US Dollar and rising Treasury yields. The price is notably below the pivot point at $2,628, which now acts as a significant barrier to any potential upside.
Immediate resistance sits at $2,649, followed by additional resistance levels at $2,667 and $2,687. These levels could limit any short-term gains unless there is a substantial shift in market sentiment.
On the support side, immediate support is at $2,603, with additional supports positioned at $2,585 and $2,564. Breaching these levels could indicate a deepening of the bearish trend, potentially bringing gold towards even lower territories.
The Relative Strength Index (RSI) currently stands at a low 21, highlighting oversold conditions. This reading suggests a potential for a near-term bounce; however, it also reflects the degree of selling pressure present in the market.
The 50-day Exponential Moving Average (EMA) is currently positioned at $2,669, well above the current price. This alignment confirms a broader bearish trend, as the current trading price remains below both key moving averages and critical resistance levels.
Given these indicators, the outlook for gold remains bearish, with the potential for further declines unless prices break above the $2,628 pivot point. For traders, an entry price below $2,612 offers a strategic selling opportunity with a target of $2,570, while a stop loss at $2,639 provides risk management.
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