Gold Price Dynamics: XAU/USD Up Amid Fluctuating US Dollar and Market Sentiments
During Thursday’s Asian trading session, GOLD (XAU/USD) witnessed a resurgence in buying interest at lower levels, partially recovering from its recent descent from near-monthly highs. This rebound occurs as the US Dollar’s recovery, which began two days ago from its lowest point since August 31, loses momentum near the 100-day Simple Moving Average (SMA).
Mounting beliefs that US interest rates have reached their zenith bolster this shift. This sentiment is further strengthened by a decline in US Treasury bond yields, which diminishes the Dollar’s appeal and provides support to the non-interest-bearing gold.
Nonetheless, gold’s value remains shy of the critical $2,000 mark. Coupled with its consistent inability to breach the $2,010 threshold, traders are advised to exercise caution before initiating new bullish positions in Gold, especially in the context of lighter trading volumes anticipated due to the US Thanksgiving holiday.
However, the prevailing dovish outlook towards the Federal Reserve’s policy could continue to favor GOLD , suggesting that significant corrective dips might still present attractive buying opportunities, with any downward movement likely to be restrained.
The US Dollar’s weakened stance further aids Gold’s ascent to positive territory during Thursday’s Asian market hours. The US Dollar’s recent upswing, fueled by the hawkish Federal Open Market Committee (FOMC) minutes, is mitigated by projections that the Federal Reserve may halt further rate hikes.
Despite policy-makers reaffirming their commitment to maintain elevated rates and tighten policies if inflation control falters, market predictions now suggest over a 50% likelihood of the US central bank reducing interest rates by May 2024.
Meanwhile, expectations of a dovish Federal Reserve overshadow encouraging US labor and consumer sentiment data released on Wednesday. The number of new US unemployment claims dropped significantly last week, reaching its lowest in over a month, while the University of Michigan’s consumer sentiment survey indicated an increase in inflation expectations for the second consecutive month in November.
Other US data revealed a more-than-anticipated decrease in orders for durable goods in October, hinting at a slowdown in economic demand. Given the lighter trading activity expected due to the Thanksgiving holiday and the repeated failure to surpass the $2,010 level, bullish Gold traders are advised to proceed with caution.
Gold Technical Outlook
Yesterday, GOLD prices demonstrated notable negativity, challenging the $1,990 barrier and thus reinforcing expectations of a continued bearish trend in the short term. The immediate bearish targets are set around $1,984. Breaching this level could extend the bearish momentum towards $1,962.35, serving as the next key support.
However, should GOLD stabilize and counteract this bearish pressure, it could resume its primary bullish trajectory, potentially testing the $2,009.30 level as an initial target.
The trading range for today is anticipated to be between $1,980 support and $2,005 resistance, with the expected trend being temporarily bearish
Gold Live Chart
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