Gold Price Analysis: Steady at $2,660 Following Record High of $2,670
- Gold price stabilizes above $2,650, up 0.14% on Wednesday.
- Traders predict a 60% chance of another 50 bps Fed rate cut in November.
- US Treasury yields and a stronger Dollar limit Gold’s upside despite bullish momentum.
Gold prices have remained resilient, hovering around $2,660 after reaching a peak of $2,670. This stability comes amidst growing expectations of a substantial interest rate cut by the Federal Reserve in the upcoming November meeting. However, high US Treasury yields and a strengthening US Dollar have tempered Gold’s upward movement.
Market Sentiment and Key Factors
Market sentiment took a slight downturn during the US session as Wall Street experienced losses. This led to a pullback in Bullion prices, although they had earlier surged to a record high of $2,670. The rise in US Treasury yields to 3.775% contributed to this retreat.
Furthermore, the US Dollar Index rebounded from a 14-month low, climbing 0.54% to 100.88, adding pressure on Gold prices.
US Economic Data and Fed Expectations
Recent US economic data indicated a cooling in manufacturing activity, while the services sector remained resilient. However, a decline in Consumer Confidence by the Conference Board suggests potential challenges in the labor market.
Following a 50 bps interest rate cut by the Fed last week, traders are increasingly confident about another significant reduction in November. The CME FedWatch Tool indicates a 60% probability of a 50 bps cut and a 40% chance of a 25 bps cut.
Outlook and Potential Drivers
- Gold prices have surged by 29% in 2024, driven by physical demand and central bank easing.
- Geopolitical tensions and ongoing easing cycles by major central banks could push Gold towards $2,700.
Daily Market Movers for Gold Price
- Gold price influenced by US Treasury bond yields.
- Geopolitical tensions in the Middle East support Gold prices.
- Traders await Fed Chair Jerome Powell’s speech amid a quiet US economic calendar.
- ETF flows, geopolitical risks, and stimulus measures could impact Gold prices.
- Global Gold ETFs saw modest inflows of 3 metric tons last week.
XAU/USD Technical Analysis: Consolidation and Outlook
Gold prices are expected to continue their upward trajectory, with potential to surpass $2,670 and target $2,700. However, the Relative Strength Index (RSI) suggests a possible correction before further gains.
If XAU/USD breaks above $2,670, it could test $2,675, $2,700, $2,750, and $2,800. On the downside, support levels are at $2,650, $2,600, $2,546, and the 50-day SMA at $2,488.
Analysis Summary
The stability of Gold prices around $2,660, driven by Fed rate cut expectations and geopolitical risks, reflects the current market sentiment. Traders are closely monitoring US economic data and Fed announcements for further insights into Bullion’s future trajectory.
Investors should consider the impact of US Treasury yields, Dollar strength, and global geopolitical tensions on Gold prices. Additionally, technical analysis points to potential resistance and support levels for XAU/USD, guiding trading decisions.