Gold Price Update: Thanksgiving Day Trading
As the world celebrates Thanksgiving, the gold price sees a return to the red zone in early Thursday trading. This shift is attributed to the pause in the decline of the US Dollar and US Treasury bond yields, impacting the precious metal’s value.
Factors Influencing Gold Price Movement
- The bearish RSI and Bear Cross on the daily chart continue to favor gold sellers.
- Gold remains subject to intense volatility due to thin liquidity resulting from the Thanksgiving holiday.
During Asian trading on Thanksgiving Thursday, the gold price retreats towards the weekly low of $2,605, reversing a two-day recovery trend. The US Dollar and US Treasury bond yields experience a resurgence, exerting downward pressure on gold amidst holiday-thinned trading conditions.
Market Sentiments Impacting Gold Price
Market sentiments are influenced by the uncertainty surrounding US President-elect Donald Trump’s tariff plans and the Federal Reserve’s interest rate outlook. Additionally, a tech sell-off in Asian indices following reports of impending measures to curb China’s AI development adds to the risk aversion wave, aiding the US Dollar’s rebound.
Despite this, concerns over trade wars may provide support to gold as a traditional safe-haven asset. Furthermore, expectations of a 15 bps rate cut by the Fed next month bolster the optimism surrounding gold prices.
Key Market Indicators
- The CME Group’s FedWatch Tool indicates a 68% probability of a December rate cut by the Fed.
- The core PCE Price Index aligns with market expectations, showing a 0.3% monthly increase and a 2.8% annual reading.
Looking ahead, heightened volatility in gold prices is expected due to thin liquidity during the Thanksgiving break. Traders should monitor global trade headlines closely as they can significantly impact risk sentiment and the price of gold.
Technical Analysis: Gold Price
On the daily chart, the bearish bias persists for gold as indicated by the Bear Cross and the RSI below the 50 level. The 21-day SMA crossing below the 50-day SMA confirms this bearish outlook.
The immediate support level is at the weekly low of $2,605, with a potential drop towards the 100-day SMA at $2,571. A break below this level could target the November 14 low of $2,537.
To initiate a recovery, gold buyers need to surpass the 21-day SMA at $2,654. Further upside targets include the 50-day SMA at $2,669 and the $2,700 level.
Gold FAQs
Gold has historically served as a store of value and a medium of exchange. It is considered a safe-haven asset, offering protection during turbulent times and acting as a hedge against inflation and depreciating currencies.
Central banks, including those in emerging economies, hold significant gold reserves to support their currencies and improve economic strength. The inverse correlation between gold and the US Dollar, as well as other risk assets, influences gold price movements.
Various factors such as geopolitical instability, economic conditions, and currency movements can impact gold prices, making it essential for investors to stay informed and monitor market trends.