Gold prices have been bullish since last Friday, when they reversed at around $1,616 and have made some really strong moves during the week. Gold jumped to a more than two-month high yesterday, as data showed that US inflation cooled off a bit in October, lifting hopes that the Federal Reserve would adopt a less aggressive approach on rate hikes, after the steepest rate hike period in history.

Gold prices eased today, although it was set for its biggest weekly gain in more than eight months, as sentiment improves on a less hawkish FED scenario in the coming months. The USD has steadied on the other hand, with the dollar index trading sideways today after yesterday’s crash although it is headed for its biggest weekly drop since March 2020. A weaker dollar makes gold more appealing to overseas buyers.

Spot GOLD climbed 2.3% to $1,745.66 an ounce earlier, having crossed the pivotal $1,750 mark yesterday. US gold futures also gained 2.3%, trading at $1,760 an ounce where they are trading now. So, we decided to open a buy Gold signal based on the 15-minute chart above.

Gold prices have risen about 5% so far this week, and traders now see a 71.5% chance of a 50-basis-point rate hike at the Fed’s December meeting. Higher rates increase the opportunity cost of holding non-yielding bullion, so expectations of a smaller rate hike boost sentiment.

“Along with a technical break above the October highs, the likelihood of gold reaching $1,800 has become much more likely,” Hewson said, adding that trading was likely to remain choppy and the U.S. dollar could weaken further from here.

Gold XAU Live Chart