Technical Analysis

GOLD Price Analysis – Nov 14, 2023

By LonghornFX Technical Analysis
Nov 14, 20233 min

Daily Price Outlook

During the early European trading hours on Tuesday, the gold (XAU/USD) maintained its upward rally and currently stands at around $1,946 marks. However, the reason for its bullish rally can be attributed to the weaker US Dollar and a decrease in US Treasury bond yields. Moving on, investors are awaiting the release of the US Consumer Price Index (CPI) data for October. Although it is anticipated to show a 0.1% month-on-month (MoM) increase, there is also an expected 3.3% year-on-year (YoY) rise.

Furthermore, the core CPI, excluding volatile food and energy prices, is expected to grow by 0.3% MoM and 4.1% YoY. However, these upcoming CPI figures will provide fresh momentum for gold prices. Therefore, the market's reaction to the CPI data is expected to play a key role in influencing the short-term trajectory of gold.

Factors Affecting Gold Prices and Federal Reserve Watch

It is worth noting that the broad-based US dollar has been losing some of its traction, slipping to 105.65 after pulling back from the 106.00 level. Although the US Treasury bond yields are experiencing a slight decline, with the 10-year yield at 4.63%. Nevertheless, the upcoming US inflation data on Tuesday could significantly influence the Federal Reserve's stance on further tightening, particularly in light of the data-supported perspectives of the Federal Open Market Committee (FOMC).

Looking forward, traders will be closely monitoring statements from key Federal Reserve officials, including Fed Vice-Chairman Philip Jefferson, New York Fed’s John Williams, and Lisa Cook. As a result, any insights offered by these officials could provide valuable clues regarding the future direction of monetary policy and its potential impact on gold prices.

Global Developments Impacting Gold Prices

On Monday, the White House announced that US President Joe Biden and Chinese President Xi Jinping are scheduled to meet this week on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit. However, the renewed tension between the US and China could exert pressure on the US Dollar and potentially benefit the gold price.

Furthermore, the geopolitical conflicts in the Middle East remain in traders’ focus. Although the rising tension could boost the safe-haven flow demand and lift the yellow metal even more.

 GOLD Price Chart – Source: Tradingview
 GOLD Price Chart – Source: Tradingview

GOLD (XAU/USD) - Technical Analysis

Gold's technical landscape remains delicately poised as it trades near $1944, a slight decrease from earlier sessions. The precious metal's movements reflect a broader hesitance in the market, with traders eyeing key economic data for direction. Currently, gold is trading beneath the 50-day Exponential Moving Average (EMA) of $1959, suggesting a bearish short-term outlook. However, the Relative Strength Index (RSI) at 36 hints at potential oversold conditions, possibly setting the stage for a bullish reversal if the right catalyst emerges.

Key resistance levels for gold sit at $1945 and $1970, with the latter near the psychological threshold of $2000. Should gold manage to breach these levels, it could signal renewed confidence among investors, driving further gains. Immediate support is found at $1931, and a break below could see the metal slide towards the significant support level at $1919, with further downside potential to $1908 if the bearish momentum continues.

In conclusion, while the current sentiment is bearish, the proximity of gold's price to oversold conditions and key support levels may provide a floor, with the potential for a rebound if upcoming U.S. inflation data impacts market expectations regarding the Federal Reserve's rate decisions. Traders will be closely monitoring these developments, as they could define the precious metal's trajectory in the short term.

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