Today’s analysis offers a comprehensive exploration of the gold markets, delving into the fundamental and technical drivers shaping current trends. This report is designed to empower investors with the insights and knowledge necessary to navigate these dynamic markets with confidence.
Despite the escalating risks of a global tariff war following US President-elect Donald Trump’s tariff announcements earlier this week, the US Dollar (USD) continued to underperform against its major counterparts. This decline is driven by persistent market expectations of a 25-basis-point (bps) rate cut by the Federal Reserve in December. Wednesday’s release of the US Personal Consumption Expenditure (PCE) Price Index, which aligned with expectations, did little to alter the dovish sentiment surrounding the Fed’s next policy move.
The CME Group’s FedWatch Tool indicates that markets are pricing in a 63% probability of a December rate cut, up from 55% a week ago. This dovish outlook continues to support the non-interest-bearing appeal of gold. Moving forward, gold’s recovery momentum will be tested amid holiday-thinned trading conditions as US traders observe the Thanksgiving long weekend.
From a technical standpoint, gold buyers are attempting to regain control, reflected by the 14-day Relative Strength Index (RSI) briefly surpassing the neutral 50 mark. However, the ongoing Bear Cross suggests uncertainty in the bullish momentum. Key levels to monitor include:
Technical indicators provide a mixed outlook:
The gold market remains at a critical juncture, with key support and resistance levels providing guidance for potential price movements in the coming sessions.
In the dynamic and ever-changing bullion markets, staying informed through both technical and fundamental analysis is essential for making sound investment decisions. This report aims to offer a balanced perspective, equipping investors with the insights needed to navigate the complexities of gold trading effectively.