GOLD Price Analysis – Nov 19, 2024
Daily Price Outlook
Gold prices rose for a second consecutive session on Tuesday, reaching a one-week high as the U.S. dollar retreated from its recent rally. The dollar's pullback, driven by profit-taking after reaching a one-year high last week, made gold more affordable for international buyers.
Ole Hansen, head of commodity strategy at Saxo Bank, noted, "The selling has run out of steam, and that's attracting cautious buyers waiting for stability to re-enter the market."
Gold, often seen as a hedge in times of currency weakness, benefited from this shift as traders speculated on potential interest rate cuts.
Fed Rate Policy and Key Data in Focus
Market participants are closely monitoring Federal Reserve officials' comments this week for clues on monetary policy. Currently, traders see a 58.9% probability of a 25-basis-point rate cut in December, compared to a 41.1% chance of rates staying steady. Interest rate reductions generally favor gold, which thrives in low-rate environments due to its non-yielding nature.
U.S. economic releases, including Building Permits (forecast at 1.44M, previous 1.43M) and Housing Starts (forecast at 1.34M, previous 1.35M), may also influence investor sentiment as they shed light on economic resilience.
Geopolitical Tensions Add to Bullish Case
Rising geopolitical risks further supported gold. Russia's largest airstrike on Ukraine in nearly three months heightened safe-haven demand for the metal. Historically, gold performs well during periods of geopolitical uncertainty, offering a haven for investors seeking stability.
Meanwhile, palladium struggled with a bearish outlook. UBS analysts pointed out, "Palladium is projected to be oversupplied due to declining demand from the autocatalyst sector," further shifting investor focus toward gold.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,620.82, up 0.34%, supported by strong bullish sentiment on the 4-hour chart. The metal remains below the pivot point at $2,627.63, which serves as a key decision level.
A break above this pivot could drive prices toward immediate resistance at $2,654.35, with further targets at $2,678.91 and $2,707.57, indicating the potential for a sustained rally.
On the downside, immediate support lies at $2,591.93, with additional levels at $2,561.74 and $2,537.16 offering key protection zones for bulls. The 50-day EMA at $2,583.72 reinforces upward momentum, aligning with the broader bullish trend.
However, the RSI at 67 signals the approach of overbought territory, which could trigger a pullback if resistance near the pivot holds.
For traders, maintaining a cautious approach is advisable. A failure to clear $2,627.63 may prompt selling pressure, with prices likely testing $2,591.93 in the short term.
Conversely, a confirmed breakout above $2,627.63 could pave the way for a challenge of the $2,654.35 level. Setting tight stop losses and monitoring volume near key levels will be critical to managing risk effectively.
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