By the end of the trading last week, the price of XAU/USD gold declined from its highest levels in the session at about 2042 dollars, to trade at about 2017 dollars an ounce, after the last round of American economic data. In addition, the price of gold was greatly affected by the transformation of the monetary policies of the global central banks led by the American Federal Reserve Bank by hinting to the possibility of reducing interest rates next year. Therefore, this may help the price of gold in stability in the emerging general direction. As we mentioned before, psychological resistance will remain $ 2000 for the most important ounce to confirm the continuation of this trend.
Recently, the price of gold was affected by the results of economic data, as the first global manufacturing manufacturer of the American S&P managers disagreed with the month of November at 49.3 with a recording of 48.2 reading. Also, the purchasing manager of services for this period exceeded the expectations at 50.6 by reading 51.3. Moreover, the American industrial production for the month of November exceeded 0.3% with a change of 0.2% (per month). finally, the Empire State Manufacturing Index in New York for December also failed to match expectations at 2 by reading -14.5.
Earlier in the same week, the Federal Reserve voted to keep the main US interest rate at 5.5 % in line with expectations. Last Thursday, US retail sales for the month of November exceeded the expectations of -0.1%, with a change of 0.3%. Retail sales, apart from cars, also exceeded the expected expectations of -0.1% with a change of 0.2%. clearly, the retail sales control group recorded a change of 0.4% compared to a change of 0% in the previous update. On the other hand, the preliminary US unemployment claims for the week ended on December 8 exceeded the expectations of 220,000 with a much lower toll at 202 thousand.
Furthermore, the price of gold continued its gains after the rise of Wednesday, after the policymakers at the American Federal Reserve said that they expected to reduce US interest rates by 75 basis points next year. Obviously, the slowdown in inflation has already prompted investors to prepare for facilitation, which prompted the price of alloys to rise shortly to a record level last week. With a cash dilution now permanently on the agenda, gold traders will monitor the return of large money investors who can pave the way for a more sustainable rise after two years of staying on the margin. For a long time, they have avoided alloys that are not beneficial, with the rises of modified cabinet bonds, according to inflation, to the highest levels since the financial crisis.
Consequently, this could lead to a continuation of outflows from gold-backed exchange-traded funds, which have been a significant headwind for the precious metal. However, with bond yields declining following the Federal Reserve's signal of easing in 2024, this may be on the verge of changing. With prices rising to just under $100 from the record high set last week in a volatile trading session, investors may be cautious about entering the market. Currently, gold is still trading at a significant premium compared to real Treasury bond yields, one of its major drivers, historically.
Gold Price Forecast and Analysis Today:
Technically, the price of gold (XAU/USD) completed the downward breach of the upward channel on the hourly chart. Despite the retreat, the gold price continues to trade slightly above the 100-hour moving average. However, the gold price has moved close to oversold levels for the 14-hour Relative Strength Index (RSI). In the short term, based on the hourly chart performance, it appears that the gold price (XAU/USD) has completed a downward breakout from the ascending channel. Also, the 14-hour RSI seems to support the bearish bias as it approaches overbought conditions. Therefore, bearish traders will target extended pullback operations at around $2014 or less at the $2000 support. On the other hand, bullish traders will look for profits at around $2031 or higher at $2041 per ounce.
In the long term and based on daily chart performance, it seems that the gold price is trading within an ascending channel. Moreover, the 14-day RSI appears to support the upward trend as it approaches overbought levels. Therefore, bullish traders will target extended gains at around $2037 or higher at the $2073 resistance. On the other hand, bearish traders will target long-term profits at around $1999 or less at the $1973 support per ounce.
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