GOLD Price Analysis – Oct 14, 2024
Daily Price Outlook
During the early part of the European session on Monday, gold prices (XAU/USD) maintained an upward trend, rising to around 2,665, with an intraday high of 2,666. However, the expectations that the Federal Reserve will continue cutting interest rates, supported by a favorable inflation outlook, have been a key driver for flows toward the non-yielding yellow metal. Apart from this, escalating geopolitical tensions in the Middle East provide further support for safe-haven bullion.
Meanwhile, US Treasury bond yields and the US dollar remain higher due to rising bets for a less aggressive policy easing by the Fed. This, coupled with a positive risk tone and optimism over China’s pledge to increase debt to revive its economy, limit any further gains for gold.
Looking forward, traders seem cautious to place strong positions as the US market is closed on Monday for the Columbus Day holiday, leaving XAU/USD vulnerable to USD price dynamics and fresh geopolitical developments. This uncertainty may lead to fluctuations in gold prices until the market reopens.
Gold Prices Rise Amid Fed Rate Cut Expectations and Inflation Slowdown
Despite higher US Treasury bond yields due to rising bets for less aggressive policy easing by the Federal Reserve (Fed), the broad-based US dollar struggled to gain traction and showed a mild bearish trend. This has led to fresh buying pressure on gold prices at the start of the new week. The market’s focus remains on expectations that the Fed will continue cutting interest rates, driven by a favorable inflation outlook. These expectations support flows toward gold, which is a non-yielding asset.
On the data front, the US Bureau of Labor Statistics reported that the headline Producer Price Index (PPI) for final demand increased by 1.8% in September, while the core gauge rose by 2.8% year-over-year. Although these readings were slightly above consensus estimates, they indicate a slowdown in price increases, which may allow the Fed to continue lowering interest rates.
According to the CME Group's FedWatch Tool, there is currently over a 90% chance that the Fed will cut borrowing costs by 25 basis points in November. However, the yield on the benchmark 10-year US government bond remains steady above 4%, supporting the US dollar near a two-month peak.
Therefore, the expectation of continued interest rate cuts by the Federal Reserve, combined with a slowing inflation rate, boosts demand for gold as a safe-haven asset. However, higher US Treasury yields could limit significant gains for gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,663.50, up 0.24%, as bullish momentum continues to drive prices higher. The immediate pivot point stands at $2,655, and gold is showing resilience above this level, supported by broader inflation concerns and geopolitical uncertainties. Immediate resistance is at $2,670, followed by stronger resistance at $2,684 and $2,699. A break above these levels could signal further bullish movement.
On the downside, immediate support is at $2,642, with further levels of defense at $2,625 and $2,606. A drop below $2,642 would suggest a shift in sentiment, potentially triggering selling pressure. The 50-day Exponential Moving Average (EMA) at $2,630 is providing solid support, reinforcing the bullish outlook as long as prices remain above this threshold.
From a technical standpoint, the Relative Strength Index (RSI) currently sits at 69, indicating bullish momentum but nearing overbought territory. Traders should watch for potential exhaustion as prices approach the key resistance zone. However, as long as gold holds above the $2,655 pivot point, the outlook remains constructive for further upside.
The strategy here would be to buy on dips above $2,660, with an ideal take profit target at $2,684. A stop-loss should be placed around $2,642 to mitigate downside risk in case of a reversal.
Gold remains in a positive technical posture, but traders should be cautious of overbought signals and prepare for potential pullbacks if support at $2,642 fails to hold.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold is supported by the 50-day EMA at $2,630, reinforcing bullish momentum.
- RSI stands at 69, signaling strong momentum but nearing overbought levels.
- Resistance at $2,670 and $2,684 could trigger further gains if broken.
Gold (XAU/USD) is trading at $2,663.50, up 0.24%, as bullish momentum continues to drive prices higher. The immediate pivot point stands at $2,655, and gold is showing resilience above this level, supported by broader inflation concerns and geopolitical uncertainties. Immediate resistance is at $2,670, followed by stronger resistance at $2,684 and $2,699. A break above these levels could signal further bullish movement.
On the downside, immediate support is at $2,642, with further levels of defense at $2,625 and $2,606. A drop below $2,642 would suggest a shift in sentiment, potentially triggering selling pressure. The 50-day Exponential Moving Average (EMA) at $2,630 is providing solid support, reinforcing the bullish outlook as long as prices remain above this threshold.
From a technical standpoint, the Relative Strength Index (RSI) currently sits at 69, indicating bullish momentum but nearing overbought territory. Traders should watch for potential exhaustion as prices approach the key resistance zone. However, as long as gold holds above the $2,655 pivot point, the outlook remains constructive for further upside.
The strategy here would be to buy on dips above $2,660, with an ideal take profit target at $2,684. A stop-loss should be placed around $2,642 to mitigate downside risk in case of a reversal.
Gold remains in a positive technical posture, but traders should be cautious of overbought signals and prepare for potential pullbacks if support at $2,642 fails to hold.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2660
Take Profit – 2684
Stop Loss – 2642
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$2400/ -$1800
Profit & Loss Per Mini Lot = +$240/ -$180
GOLD Price Analysis – Oct 11, 2024
Daily Price Outlook
Gold (XAU/USD) continued its upward trend, remaining well-supported around the 2,639 mark and reaching an intra-day high of 2,647. This momentum was fueled by weak US jobs data, which reinforced expectations for a Federal Reserve (Fed) rate cut in November.
Such a rate cut typically enhances gold's appeal, as it reduces the opportunity cost of holding this non-yielding asset, making it more attractive to investors.
However, the recent US Jobless Claims report revealed an unexpected increase in unemployment claims, contributing to a dip in US Treasury yields and a slight weakening of the US dollar. This environment further bolstered gold prices.
Moreover, safe-haven inflows into gold have increased amid escalating geopolitical tensions. Israel has intensified its bombings of Hezbollah targets in Lebanon, resulting in significant collateral damage, while fears of Israel's potential retaliation against Iran add to market uncertainty and elevate demand for the precious metal.
US Economic Data and Fed Policy Shift Boost Gold Prices Amid Job Market Weakness
On the US front, the broad-based US dollar weakened slightly on Thursday after a surprise rise in jobless claims, which showed 258K new claims, much higher than the expected 230K.
This rise in unemployment claims, partly attributed to people leaving Florida ahead of Hurricane Milton, signaled some weakness in the job market.
US Treasury yields dipped, and gold prices rebounded from just above the $2,600 psychological level.
Continuing jobless claims also increased to 1.861 million, indicating a slowing labor market, which could lead the Federal Reserve to cut interest rates at its November meeting to stimulate the economy.
Despite slightly higher-than-expected inflation figures, with September’s Consumer Price Index (CPI) showing a 2.4% year-over-year increase, the Fed appears to be focusing more on employment than inflation.
This led to an increase in market expectations for a 25-basis-point rate cut in November, with an 89% probability according to the CME FedWatch tool.
Upcoming economic data, including the Producer Price Index (PPI) and the US Michigan Consumer Sentiment survey, could further impact gold prices, but any significant effect is expected only if the data surprises market forecasts.
Therefore, the rising US jobless claims and the Fed's focus on employment over inflation boosted gold prices, as it increased expectations of a Fed rate cut in November, making gold more attractive as a safe-haven asset amid economic uncertainty.
Rising Geopolitical Tensions Fuel Safe-Haven Demand for Gold
On the geopolitical front, tensions are rising as Israel intensifies airstrikes on Hezbollah targets in Lebanon, resulting in at least 22 deaths and many injuries. This marks the deadliest attack in Beirut since 2006, aimed at a location where a senior Hezbollah official was present, though he survived.
Meanwhile, a UN inquiry has accused Israel of intentionally damaging Gaza's healthcare system during its conflict with Hamas, describing these actions as potential war crimes.
Israel's military has confirmed it killed a commander from Hezbollah and targeted several facilities in southern Lebanon.
As tensions escalate, the Israeli security cabinet is discussing its response to recent missile attacks from Iran, with U.S. President Joe Biden urging a "proportional" reaction.
Consequently, the rising geopolitical tensions and conflict in the Middle East are driving safe-haven demand for gold.
Investors often turn to gold during periods of uncertainty and violence, leading to increased prices as they seek stability amid the escalating risks.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading at $2,639.53, up 0.42% on the day, as the metal consolidates above its immediate support at $2,619.22. The price remains below the pivot point of $2,655.00, suggesting that bullish momentum is cautiously building.
However, the metal faces a significant challenge near $2,654.00, where the 50-day Exponential Moving Average (EMA) at $2,640.54 is capping further gains.
A sustained move above the $2,655 resistance could open the path toward the next resistance levels at $2,670.00 and $2,686.09.
On the downside, a failure to maintain levels above $2,632 could trigger a short-term correction, exposing gold to immediate support at $2,619.22, followed by deeper levels at $2,605.24 and $2,592.16.
The Relative Strength Index (RSI) stands at 55, reflecting moderate bullish sentiment but lacking strong momentum to push the price beyond the key $2,655 level.
If prices close above $2,655, gold could target $2,670 and potentially test $2,686.09 in the near term. However, if sellers regain control and drive the price below $2,619.22, a drop toward $2,605.24 could ensue, signaling potential downside risks.
Overall, the short-term outlook for gold remains cautiously bullish above $2,632. A breakout above $2,655 would confirm renewed upward momentum, while a dip below $2,619.22 could shift the trend toward a bearish stance.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Gold faces resistance at $2,654.00, $2,670.00, and $2,686.09.
- Support Levels: Immediate support is at $2,619.22, followed by $2,605.24 and $2,592.16.
- RSI at 55: Indicates moderate bullish sentiment; a break above $2,655 could accelerate buying interest.
Gold (XAU/USD) is currently trading at $2,639.53, up 0.42% on the day, as the metal consolidates above its immediate support at $2,619.22. The price remains below the pivot point of $2,655.00, suggesting that bullish momentum is cautiously building.
However, the metal faces a significant challenge near $2,654.00, where the 50-day Exponential Moving Average (EMA) at $2,640.54 is capping further gains. A sustained move above the $2,655 resistance could open the path toward the next resistance levels at $2,670.00 and $2,686.09.
On the downside, a failure to maintain levels above $2,632 could trigger a short-term correction, exposing gold to immediate support at $2,619.22, followed by deeper levels at $2,605.24 and $2,592.16. The Relative Strength Index (RSI) stands at 55, reflecting moderate bullish sentiment but lacking strong momentum to push the price beyond the key $2,655 level.
If prices close above $2,655, gold could target $2,670 and potentially test $2,686.09 in the near term. However, if sellers regain control and drive the price below $2,619.22, a drop toward $2,605.24 could ensue, signaling potential downside risks.
Overall, the short-term outlook for gold remains cautiously bullish above $2,632. A breakout above $2,655 would confirm renewed upward momentum, while a dip below $2,619.22 could shift the trend toward a bearish stance.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2632
Take Profit – 2655
Stop Loss – 2615
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$2300/ -$1700
Profit & Loss Per Mini Lot = +$230/ -$170
GOLD Price Analysis – Oct 10, 2024
Daily Price Outlook
Gold prices (XAU/USD) managed to break a six-day losing streak on Thursday, bouncing back from a nearly three-week low and hovering around the 2,618 level.
However, this rebound lacks strong support and may lose some momentum due to rising expectations for a 25 basis points interest rate cut by the Federal Reserve (Fed) in November.
This scenario helps the US Dollar maintain its recent gains, reaching an eight-week high, which could weigh on the demand for gold.
Looking forward, traders are likely to adopt a wait-and-see approach ahead of the important US consumer inflation figures to be released later in the North American session.
The Consumer Price Index (CPI) report will be crucial in shaping expectations about the size of the Fed's rate cut next month, which could impact USD demand and influence gold prices.
Moreover, ongoing conflicts in the Middle East may present short-term trading opportunities for investors in the safe-haven metal.
Strong US Dollar and Rate Cut Expectations Pressure Gold Prices
On the US front, the broad-based US Dollar (USD) is maintaining its strong gains, recently reaching an eight-week high. This upward momentum is due to rising expectations for a 25 basis points (bps) interest rate cut by the Federal Reserve (Fed) in November.
Minutes from the September Federal Open Market Committee (FOMC) meeting revealed that most members supported a larger 50 bps cut, believing inflation would trend towards the 2% target.
However, some members preferred a smaller 25 bps reduction, citing ongoing high inflation, strong economic growth, and low unemployment rates.
Traders are now anticipating a higher chance that the Fed will only reduce rates by 25 bps in November, with over a 20% possibility that rates will remain unchanged. Dallas Fed President Lorie Logan expressed concerns about the economic outlook but favored smaller cuts.
Boston Fed President Susan Collins emphasized that the Fed's decisions will be data-dependent, aiming to maintain a healthy labor market. San Francisco Fed President Mary Daly noted that one or two more cuts could happen this year, but the September cut doesn't determine future moves.
Meanwhile, yields on the two-year and ten-year US government bonds have reached their highest levels since mid-August and late July, respectively.
Therefore, the strong US Dollar and rising interest rate expectations may pressure gold prices as higher rates increase the opportunity cost of holding non-yielding assets. Consequently, gold might struggle to gain traction, limiting its appeal to investors.
Escalating Middle East Tensions Boost Demand for Gold as a Safe Haven
Apart from this, the ongoing conflicts in the Middle East are attracting attention from investors seeking short-term opportunities in gold, a safe-haven asset.
There is growing concern over escalating tensions, particularly between Israel and Iran. Israeli Defense Minister Yoav Gallant has warned that any military action against Iran would be "lethal, precise, and surprising."
This raises fears of further instability in the region, prompting investors to consider gold as a protective measure against potential risks. As a result, gold could see increased demand if tensions continue to rise, impacting its price positively.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,614.40, up 0.26%, as the precious metal attempts to stage a recovery after several days of decline. The 4-hour chart shows Gold finding support near the $2,606 pivot point, which aligns with the trendline support observed since early October.
This level is critical, as maintaining it could foster further bullish momentum. Immediate resistance is positioned at $2,624, followed by the 50-day Exponential Moving Average (EMA) at $2,635.
A break above $2,635 could open the door for an advance toward $2,647, where stronger selling pressure may re-emerge.
However, if Gold fails to hold above the $2,606 pivot, the immediate support level shifts to $2,596, with deeper support at $2,587. A breach below these levels could signal a bearish shift, exposing prices to the $2,576 area.
The Relative Strength Index (RSI) currently stands at 43, indicating neutral sentiment but hovering near oversold territory.
This suggests that while bears have a slight upper hand, a potential reversal could be on the horizon if buying interest gains traction above $2,624.
The technical outlook remains cautious yet slightly optimistic, contingent on Gold's ability to stay above the $2,606 support level. Traders should watch for a decisive break above $2,635 to confirm the bullish bias, while a drop below $2,596 could trigger further selling.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Trendline Support: Gold is trading above the key trendline at $2,606, maintaining a potential for bullish momentum.
- Immediate Target: A break above $2,624 may push prices toward the $2,635-$2,647 resistance zone.
Bearish Risk: A breach below $2,596 could lead to a downward move toward $2,587 and potentially $2,576.
Gold (XAU/USD) is trading at $2,614.40, up 0.26%, as the precious metal attempts to stage a recovery after several days of decline. The 4-hour chart shows Gold finding support near the $2,606 pivot point, which aligns with the trendline support observed since early October.
This level is critical, as maintaining it could foster further bullish momentum. Immediate resistance is positioned at $2,624, followed by the 50-day Exponential Moving Average (EMA) at $2,635. A break above $2,635 could open the door for an advance toward $2,647, where stronger selling pressure may re-emerge.
However, if Gold fails to hold above the $2,606 pivot, the immediate support level shifts to $2,596, with deeper support at $2,587. A breach below these levels could signal a bearish shift, exposing prices to the $2,576 area.
The Relative Strength Index (RSI) currently stands at 43, indicating neutral sentiment but hovering near oversold territory. This suggests that while bears have a slight upper hand, a potential reversal could be on the horizon if buying interest gains traction above $2,624.
The technical outlook remains cautious yet slightly optimistic, contingent on Gold's ability to stay above the $2,606 support level. Traders should watch for a decisive break above $2,635 to confirm the bullish bias, while a drop below $2,596 could trigger further selling.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2610
Take Profit – 2628
Stop Loss – 2603
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$1800/ -$700
Profit & Loss Per Mini Lot = +$180/ -$70
GOLD Price Analysis – Oct 09, 2024
Daily Price Outlook
Gold prices (XAU/USD) prolonged its six-day downward trend and remained well offered around $2,621 after hitting an intra-day low of $2,615. This downward trend is triggered by the bullish US dollar, which gained positive traction in the wake of decreasing expectations for a significant Fed rate cut in November. Traders seems cautious to place any strong position ahead of the upcoming FOMC meeting minutes and U.S. inflation data. Alongside these factors, reports of a potential ceasefire between Hezbollah and Israel are intensifying the downward pressure on gold prices.
Strong US Dollar and Mixed Fed Signals Weigh on Gold Prices
On the U.S. side, the US dollar continued its upward trend, remaining well-supported around the multi-week high reached last Friday. This strength is driven by a reduction in investor expectations for an aggressive rate cut by the Federal Reserve in November, which has placed additional pressure on gold prices, pushing them below the $2,630 support level. According to the CME Group's FedWatch Tool, there is now an 85% chance of a 25-basis-point rate cut in November, with a 50-basis-point cut anticipated by year-end.
Fed officials have conveyed mixed signals regarding interest rate policy. New York Fed President John Williams suggested that a gradual reduction in interest rates is appropriate, using the September 50-basis-point cut as a reference for future actions. In contrast, Fed Governor Adriana Kugler emphasized that policy decisions would be data-driven, indicating that more cuts could occur if inflation continues to improve.
Meanwhile, Boston Fed President Susan Collins pointed out that while inflation is cooling, the U.S. economy and labor markets remain robust. Fed Vice Chair Philip Jefferson also noted that economic growth is solid, inflation has eased, and the labor market has cooled from its previous overheating.
In the meantime, the 10-year U.S. government bond yield remains above 4%, exerting further pressure on gold. As a result, the reduced expectations for aggressive Fed rate cuts, coupled with strong U.S. economic data, have bolstered the US dollar, pushing gold prices lower.
Easing Geopolitical Tensions and Technical Selling Pressure Gold Prices Downward
On the geopolitical front, Iran-backed Hezbollah indicated on Tuesday that it might be willing to consider a ceasefire without requiring an end to the Gaza war as a precondition. This development has sparked hopes for reduced tensions between Lebanon and Israel, which could diminish the demand for safe-haven assets like gold. Consequently, the combination of easing geopolitical tensions and technical factors is contributing to the current downturn in gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is currently trading lower at $2,613.02, down 0.34% for the day, signaling continued selling pressure as the metal struggles to hold above critical support levels. On the 4-hour chart, gold is trading below the pivot point at $2,623.02, indicating a bearish outlook in the near term. Immediate resistance is seen at $2,632.79, with additional hurdles at $2,640.56 and $2,655.51 if buying interest picks up.
On the downside, immediate support is located at $2,606.30, followed by deeper support levels at $2,596.45 and $2,586.52. The 50-day Exponential Moving Average (EMA) at $2,635.53 suggests a strong resistance level, reinforcing the bearish sentiment. The Relative Strength Index (RSI) stands at 37, indicating the metal is approaching oversold territory, which may suggest a potential rebound if prices stabilize above the $2,620 mark.
Given the bearish momentum, traders may consider selling below $2,620 with a target at $2,606, while a stop-loss order above $2,627 could limit risk. A decisive break below $2,606 could accelerate selling pressure, driving prices toward the next support level at $2,596. Conversely, a recovery above $2,623 could signal a reversal, with potential gains toward $2,635.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Sentiment: Gold remains below the pivot point of $2,623.02, indicating continued downward pressure.
- Key Support Levels: Immediate support stands at $2,606.30, with further downside potential to $2,596.45 and $2,586.52.
- RSI Near Oversold: RSI at 37 suggests the possibility of a rebound if prices stabilize above the $2,620 level.
Gold (XAU/USD) is currently trading lower at $2,613.02, down 0.34% for the day, signaling continued selling pressure as the metal struggles to hold above critical support levels. On the 4-hour chart, gold is trading below the pivot point at $2,623.02, indicating a bearish outlook in the near term. Immediate resistance is seen at $2,632.79, with additional hurdles at $2,640.56 and $2,655.51 if buying interest picks up.
On the downside, immediate support is located at $2,606.30, followed by deeper support levels at $2,596.45 and $2,586.52. The 50-day Exponential Moving Average (EMA) at $2,635.53 suggests a strong resistance level, reinforcing the bearish sentiment. The Relative Strength Index (RSI) stands at 37, indicating the metal is approaching oversold territory, which may suggest a potential rebound if prices stabilize above the $2,620 mark.
Given the bearish momentum, traders may consider selling below $2,620 with a target at $2,606, while a stop-loss order above $2,627 could limit risk. A decisive break below $2,606 could accelerate selling pressure, driving prices toward the next support level at $2,596. Conversely, a recovery above $2,623 could signal a reversal, with potential gains toward $2,635.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2620
Take Profit – 2606
Stop Loss – 2627
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$1400/ -$700
Profit & Loss Per Mini Lot = +$140/ -$70
GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold faces resistance at $2,656, with RSI at 46, indicating limited bullish momentum for now.
- Breaking below $2,631 support could trigger a deeper correction toward $2,624 and $2,617 levels.
- CPI report impact on gold likely to drive next major move, watch for key resistance and support levels.
Gold (XAU/USD) is trading at $2,641.84, slightly down by 0.04% in the current session. After encountering strong resistance at $2,651—marked by the 50-day Exponential Moving Average (EMA)—the yellow metal has struggled to gain momentum. Price action remains within a tight range, as traders look for catalysts to determine the next direction.
On the 4-hour chart, gold is hovering just below the pivot point at $2,645, indicating a lack of clear directional bias. Immediate resistance lies at $2,656, followed by $2,663 and $2,670. Breaking above these levels could trigger a short-term bullish trend. However, with the Relative Strength Index (RSI) sitting at 46, there’s limited bullish momentum, and gold could remain under pressure in the short term.
Conversely, if prices break below immediate support at $2,631, gold could see further declines, with subsequent support levels at $2,624 and $2,617. The market remains sensitive to macroeconomic indicators, with the upcoming U.S. Consumer Price Index (CPI) report likely to have a significant impact on gold prices.
Traders are advised to monitor key price levels closely. A move below $2,631 may signal a deeper correction, while a sustained break above $2,656 could pave the way for a potential recovery.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2650
Take Profit – 2633
Stop Loss – 2660
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$1700/ -$1000
Profit & Loss Per Mini Lot = +$170/ -$100
GOLD Price Analysis – Oct 08, 2024
Daily Price Outlook
Gold price (XAU/USD) is unable to stop its downward trend and remains under pressure, nearing the $2,630 support level. The main reason for this decline is Friday's strong US jobs report, which showed a resilient labor market. This data has led investors to scale back expectations for a major interest rate cut by the Federal Reserve, reducing the appeal of non-yielding assets like gold.
Despite this, a slight drop in the US Dollar and concerns over escalating tensions in the Middle East could still support gold. Traders are cautious ahead of key events this week, including the release of the FOMC minutes on Wednesday and US inflation data (CPI and PPI) later in the week, which could impact gold’s direction further.
US Economic Indicators and Geopolitical Tensions Influencing Gold Prices
On the US front, the broad-based US Dollar weakened slightly, but a strong US jobs report from September has reduced expectations for an aggressive rate cut by the Federal Reserve. The report highlighted a strong labor market, causing investors to scale back their bets on significant interest rate cuts, which has hurt demand for gold, a non-yielding asset. According to the CME's FedWatch tool, there is now an 85% chance of a 25 basis points rate cut at the next Fed meeting in November.
Meanwhile, Fed officials, like Minneapolis President Neel Kashkari, indicated that risks have shifted from high inflation to potential rising unemployment. St. Louis Fed President Alberto Musalem also supported further interest rate cuts depending on economic performance. Traders are also cautious ahead of key US inflation data (CPI and PPI) and the FOMC meeting minutes, both due this week, which could further influence gold prices.
Therefore, the US jobs report and shifting Fed policy expectations have weakened gold demand due to reduced interest rate cut bets. However, rising geopolitical tensions may provide some support for gold as a safe-haven asset amid uncertainty in the market.
Escalating Geopolitical Tensions and Economic Concerns Impacting Gold Prices
On the geopolitical front, tensions are escalating as Hezbollah launched rockets at Israel’s Haifa port and a military base near Tel Aviv, prompting Israel to respond with airstrikes on buildings in southern Beirut. Investors are worried that these conflicts could spread, which may boost gold's appeal as a safe-haven asset and help limit further losses in its price.
In addition, China's National Development and Reform Commission (NDRC) warned of increasing downward pressure on the Chinese economy. Traders are now focused on upcoming economic data, starting with the release of the FOMC meeting minutes on Wednesday. This will be followed by key US inflation figures on Thursday and Friday, which could significantly impact market sentiment and influence gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,641.84, slightly down by 0.04% in the current session. After encountering strong resistance at $2,651—marked by the 50-day Exponential Moving Average (EMA)—the yellow metal has struggled to gain momentum. Price action remains within a tight range, as traders look for catalysts to determine the next direction.
On the 4-hour chart, gold is hovering just below the pivot point at $2,645, indicating a lack of clear directional bias. Immediate resistance lies at $2,656, followed by $2,663 and $2,670. Breaking above these levels could trigger a short-term bullish trend. However, with the Relative Strength Index (RSI) sitting at 46, there’s limited bullish momentum, and gold could remain under pressure in the short term.
Conversely, if prices break below immediate support at $2,631, gold could see further declines, with subsequent support levels at $2,624 and $2,617. The market remains sensitive to macroeconomic indicators, with the upcoming U.S. Consumer Price Index (CPI) report likely to have a significant impact on gold prices.
Traders are advised to monitor key price levels closely. A move below $2,631 may signal a deeper correction, while a sustained break above $2,656 could pave the way for a potential recovery.
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