GOLD Price Analysis – Nov 13, 2024
Daily Price Outlook
Gold prices (XAU/USD) extended their upward momentum on Wednesday, holding steady around $2,613. This rise coincided with a dip in the US dollar, which eased from recent highs. The dollar's softness likely provided support for gold as traders adjusted their positions ahead of the upcoming US Consumer Price Index (CPI) data.
Another factor that has been boosting gold is the uncertainty surrounding President-elect Donald Trump’s potential tariffs, which, along with global economic concerns, drive demand for gold as a safe haven.
US Inflation and Policy Uncertainty Drive Gold Prices as Investors Eye CPI Data
On the US front, the broad-based US dollar lost some of its traction and edged lower as the market awaits the release of the US Consumer Price Index (CPI) data for October at 13:30 GMT. Investors are looking closely at the inflation figures to get clues about the Federal Reserve’s next moves.
However, the CPI is expected to show that overall inflation increased to 2.6% year-on-year, up from 2.4% in September. Meanwhile, Core inflation, which excludes food and energy prices, is forecast to remain steady at 3.3%.
On a monthly basis, both the headline and core inflation are expected to rise by 0.2% and 0.3%, respectively. This data will be crucial for traders, as it could impact expectations for interest rate changes by the Federal Reserve in its December meeting.
Inflation data has gained more attention recently, especially with concerns that US inflation could rise again. There is also speculation that President-elect Donald Trump may raise import tariffs by 10% and cut corporate taxes, which could affect inflation.
In the meantime, the comments from former Fed official Loretta Mester also added to the uncertainty, suggesting that there may be fewer rate cuts in 2025, partly due to potential tariff hikes. With all these factors in play, investors are closely monitoring the CPI release, as it could influence the direction of gold prices in the coming weeks.
Therefore, if US inflation rises as expected, it could signal a more cautious approach from the Federal Reserve, limiting interest rate cuts. This uncertainty may drive investors towards gold as a safe haven, supporting its price in the coming weeks.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) has seen a slight downturn, currently trading at $2606.52, reflecting a 0.31% decline for the day. The metal has recently faced selling pressure amid a stronger U.S. dollar and rising yields, positioning it at a critical juncture as it tests immediate support levels.
The immediate pivot point sits at $2612.16, a level that has held some significance in recent sessions. If gold breaks below this pivot, bearish momentum may accelerate. The immediate resistance level is seen at $2633.12, followed by stronger resistance at $2648.86 and $2672.91.
Conversely, support is located just below at $2591.91, with further downside levels at $2572.59 and a more substantial base at $2553.50. These levels could provide critical turning points, especially if the precious metal encounters further selling pressure.
Gold’s Relative Strength Index (RSI) is currently at 45, indicating a neutral to slightly bearish sentiment in the market. The 50-day Exponential Moving Average (EMA) is positioned at $2621.11, slightly above the current price. This suggests a bearish bias, as the metal is trading below this average, often an indicator of downward momentum.
For traders, a potential sell entry below the $2612 pivot could target lower levels around $2582, aligning with the technical support zones. However, caution is advised, with a stop-loss placed at $2632 to manage risk against any unexpected upside.
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