GOLD Price Analysis – Nov 22, 2024
Daily Price Outlook
Gold (XAU/USD) continues to shine, finally hitting the $2,700 mark, thanks to escalating tensions between Russia and Ukraine. Investors see gold as a safe bet, especially during uncertain times like these, and they’re confident it could climb even higher.
Many believe President-elect Donald Trump’s policies might push inflation up, which could weaken the dollar and make gold more appealing.
Interestingly, even though the US dollar has hit its strongest level since October 2023, gold prices are still on the rise. Higher inflation fears and the possibility that the Federal Reserve might hold back on cutting interest rates are fueling this rally.
US Dollar Strengthens Amid Rate Cut Uncertainty, But Gold Continues to Rise as a Safe Haven Amid Inflation Concerns
On the US side, the dollar has been on the rise, hitting its highest point since October 2023. This surge comes as investors are starting to think the Federal Reserve might not cut interest rates as quickly as they originally expected. A big reason for this is the worry that US President-elect Donald Trump's policies could push inflation higher, which might make the Fed hesitate on rate cuts.
Recently, some top Federal Reserve officials, including Chairman Jerome Powell, have raised concerns about the risks of inflation and warned against easing policies any further. As a result, traders are now betting on a 55% chance that the Fed will cut interest rates by 0.25% in December, according to the CME Group’s FedWatch Tool.
However, Chicago Fed President Austan Goolsbee recently pointed out that inflation is moving closer to the Fed’s 2% target and suggested it might be a good idea to slow down the rate cuts. Similarly, New York Fed President John Williams mentioned that the labor market is in a good place and isn't contributing to rising inflation.
On the economic front, US weekly jobless claims fell by 6,000 last week, dropping to 213,000, which is the lowest number in seven months. Existing home sales also bounced back in October, marking their first annual increase since mid-2021.
However, the Philly Fed Manufacturing Index revealed an unexpected decline in manufacturing activity in the Philadelphia area this November. Investors will be closely watching Friday’s flash PMIs for more clues about the global economy, as they could have an impact on gold prices.
Despite the rising US dollar and expectations of slower rate cuts, gold continues to rise strongly. This is driven by ongoing inflation concerns and the demand for gold as a safe haven, with investors seeking protection from economic uncertainties.
Escalating Russia-Ukraine Tensions Boost Gold Prices as Investors Seek Safe Haven Amid Market Uncertainty
On the other hand, the escalating tensions between Russia and Ukraine are driving more investors to gold as a safe haven. As a result, gold prices climbed for the fifth straight day on Friday, even with the US dollar remaining strong. Recently, Russian forces launched a new intermediate-range missile at Ukraine, retaliating against Ukraine’s use of US and UK-made missiles to target sites in Russia.
The ongoing conflicts are adding more uncertainty to the market, making gold a more appealing choice for those wanting to shield their investments from risk.
GOLD (XAU/USD) – Technical Analysis
Gold prices are trading at $2,695.58, marking a 0.97% increase as bullish momentum strengthens. The metal is nearing immediate resistance at $2,711.09, with further levels at $2,726.95 in focus.
On the downside, immediate support lies at $2,673.90, followed by $2,645.52 and $2,635.05, providing a safety net for price corrections. The pivot point at $2,691.73 is crucial for maintaining upward momentum. A sustained move above this level would bolster bullish sentiment and validate further gains.
The RSI stands at 81, signaling overbought conditions that could trigger a short-term pullback. Despite this, the 50-day EMA at $2,639.13 continues to act as strong dynamic support, reinforcing the broader uptrend. Price action remains aligned with a bullish channel, and the upward trajectory is expected to persist as long as prices hold above the pivot.
Traders are advised to consider buying above $2,684 with a take-profit target at $2,710 and a stop-loss at $2,666. A breakout above $2,711.09 could push prices toward $2,726.95, but caution is warranted due to overbought signals from the RSI.
Related News
- EUR/USD Price Analysis – Nov 22, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.