- The recovery of the US dollar and profit-taking selling were factors that helped in a downward correction for the price of gold XAU/USD towards the level of 1955 dollars per ounce after gains for the price of gold reached the resistance level of 1975 dollars per ounce.
- As, we mentioned before, the outlook for gold prices in the coming days remains positive as long as global geopolitical tensions continue to rise, in addition to the increase in the pace of purchases by global central banks of gold, in addition to expectations of halting the path of tightening the policy of global central banks amid easing global inflation levels.
Bullish Stocks and Indices
Yesterday, Global stock market indices rose, supported by a broad rise in Wall Street markets, after an encouraging report on inflation in the United States of America raised hopes for an end to raising interest rates by the Federal Reserve. According to global market trading, the French CAC 40 index rose by 0.5% in early trading to 7,221.25 points. Recently, The German DAX index rose 0.2% to 15,644.95, while the British FTSE 100 index rose 1.0% to 7,515.58. The Dow Jones Industrial Average rose 0.2%, while the S&P 500 rose 0.3%.
Before that, the Nikkei 225 index in Tokyo rose by 2.5% to close at 33,519.70 points, as investors seemed to ignore the news that the Japanese economy contracted at a worse-than-expected annual rate of 2.1% in the period from July to September. On a quarterly basis, it contracted by 0.5%. In this regard, analysts say that the No. 3 economy in the world suffers from weak private demand from consumers and companies, weak demand for Japanese exports and slow wage growth, which will continue to affect consumer spending, which is the main driver of the Japanese economy.
In general, Wall Street markets were affected by a range of economic data in search of clues about expectations of the US Federal Reserve's next steps. US retail sales slowed in October and previous months were revised higher – indicating some resilience heading into the holiday season. Prices paid to US producers unexpectedly fell by the most since April 2020.
Overall, the rally in stocks this month has pushed the S&P 500 closer to its record on a total return basis, reached in January 2022. And in the year since it reached a new all-time high — after a long period below that high. NEW – The metric has gone up nine out of 10 times, according to data compiled by Bespoke Investment Group. Meanwhile, Treasury yields fell on Wednesday in a move that was not a direct response to the economic data — but rather a relief that consumption was not further undermined by the labor market decline, and the bond market is at risk of leaning too heavily toward interest rate cuts next year because “The inflation problem is far from being solved.”
Gold price forecast for XAU/USD today:
Despite the slowdown in its gains, the outlook for gold prices XAU/USD remains positive and the possibility of moving towards stronger upward levels is not excluded. Thus, the return to the psychological resistance level of $2,000 per ounce is not excluded again if the bulls succeed in breaking the resistance levels of $1,975 and $1,983 again. Until now, we still prefer to buy gold from every downside level for the factors mentioned at the beginning of the analysis. Shortly, according to the latest performance, the nearest support levels for gold will be $1,945 and $1,930, respectively.
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