GOLD Price Analysis – Nov 14, 2024
Daily Price Outlook
Gold prices (XAU/USD) lost its upward upward momentum and remain under pressure around $2,555 level. However, this drop is largely due to the bullish US dollar, which has been strengthening as investors anticipate that US President-elect Donald Trump’s growth-focused policies could drive inflation higher, prompting the Federal Reserve to pause its rate cuts.
This outlook has pushed up US Treasury yields, making the dollar even stronger.As a result, the dollar is now at its highest level since November 2023, putting extra pressure on gold prices.
Looking ahead, traders are keeping an eye on the US Producer Price Index (PPI) for any short-term opportunities. However, the main focus remains on Fed Chair Jerome Powell’s upcoming speech later in the US session, as it could offer more hints about the Fed’s next moves on policy.
US Dollar Strengthens Amid Inflation Concerns and Rate Cut Expectations
On the US front, the broad-based US dollar has been gaining bullish traction and remained strong, hovering around 106.60. This rise is mainly due to optimism about "Trump trades" and the latest US Consumer Price Index (CPI) data for October.
On the data front, the US Bureau of Labor Statistics reported that the headline CPI rose by 0.2% in October, with a 2.6% increase over the past year. The core CPI, which excludes food and energy, increased by 0.3% and 3.3% year-on-year.
These numbers confirmed expectations that the Federal Reserve may cut interest rates again in December, especially with signs of a softening labor market. As a result, the likelihood of a 25-basis-point rate cut in December has jumped to over 80%.
Fed officials are also weighing in on the situation. Dallas Fed President Lorie Logan said the central bank has made progress on inflation but needs to be cautious. Other leaders, like St. Louis Fed President Alberto Musalem, are worried about rising inflation, which makes it harder for the Fed to cut rates.
Additionally, Trump’s proposed tax cuts and tariffs could push inflation higher, limiting future rate cuts. This optimism keeps bond yields high and continues to support the US dollar.
Therefore, the strengthening US dollar, fueled by expectations of rate cuts and inflation concerns, puts downward pressure on gold prices.
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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