Gold Price Analysis: Stuck at $2,625 Amid Geopolitical Tensions
- Gold price remains stagnant at $2,625, influenced by geopolitical factors and a stronger US Dollar.
- Trump’s tariff threats on Canada, Mexico, and China bolster the Greenback, sparking concerns of a global trade war.
- Ceasefire hopes between Israel and Hezbollah diminish Gold’s appeal as a safe-haven asset.
Despite US President Donald Trump’s tariff warnings to key trading partners and other geopolitical uncertainties, Gold prices have remained steady around $2,625. Typically, such events would cause a surge in the price of the precious metal, but recent developments have constrained its movement.
Factors Influencing Gold Prices
The XAU/USD pair is currently trading at $2,625 with minimal fluctuations. The release of the latest Federal Open Market Committee (FOMC) minutes indicated a possible pause in rate cuts by the Federal Reserve, should inflation levels stay elevated.
Trump’s trade threats against Canada, Mexico, and China have strengthened the US Dollar, heightening fears of a global trade conflict that has weighed on Gold prices.
Additionally, optimism surrounding a ceasefire between Israel and Hezbollah, along with the nomination of Scott Bessent as the US Treasury Secretary, has boosted risk appetite and reduced demand for Gold as a safe-haven asset.
However, potential escalation in the Ukraine-Russia conflict has prevented Gold from dropping below $2,600 per troy ounce, despite some recovery in the Greenback.
Upcoming Economic Indicators
The US economic calendar for the week includes key data releases such as Durable Goods Orders, Initial Jobless Claims, and the Personal Consumption Expenditures (PCE) Price Index, which is the Fed’s preferred inflation gauge.
Daily Market Overview: Key Drivers of Gold Prices
- Gold prices rose as US real yields increased by eight basis points to 2.014%.
- The US Dollar Index surged by over 0.16%, reaching 107.00.
- Investors now see a 59% chance of a 25-basis-point rate cut at the December FOMC meeting, up from 52% previously.
- Consumer Confidence data for November exceeded expectations, with a reading of 111.7 compared to 109.6 in October.
- Market expectations for Fed easing by the end of 2024 stand at 22 basis points, based on data from the Chicago Board of Trade.
Technical Analysis: Gold Price Trends
Technical indicators suggest a neutral to downward bias in Gold prices after a dip below $2,700. The XAU/USD pair is forming lower highs and lower lows, with a potential test of the 100-day SMA at $2,565 if prices fall below $2,600. Conversely, a rebound above the 50-day SMA at $2,665 could lead to a challenge of $2,700 and higher levels.
Key resistance levels to watch include $2,700 and $2,750, with an ultimate target at the previous all-time high of $2,790. However, bearish signals from oscillators like the Relative Strength Index (RSI) indicate a seller-dominated market.
Economic Indicator Insight: FOMC Minutes
The FOMC, responsible for setting US monetary policy, released its latest meeting minutes. These minutes provide crucial insights into the Fed’s future interest rate decisions and economic outlook. The release can impact financial markets and investor sentiment, making it a key event to monitor.
Last release: Tue Nov 26, 2024
Frequency: Irregular
Actual: –
Consensus: –
Previous: –
Source: Federal Reserve