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Gold Analysis: Recovering Gains Lack Momentum

  • Gold futures edged lower at the start of this important trading week as global financial markets brace for the upcoming US inflation report and Federal Reserve policy meeting.
  • Gold prices had been trending lower over the past week, falling more than 2% amid expectations that interest rates will remain elevated for longer.
  • According to gold trading platforms, gold prices fell to the $2,287 support level before bouncing back to settle around $2,310 per ounce at the time of writing.
  • Prior to that, gold prices had risen 12% since the beginning of the year and were up nearly 18% over the past 12 months. 

Gold Analysis Today - 11/06: Gains Lack Momentum (Chart)

In line with gold's performance, silver prices, the sister metal, made some modest gains as the trading week began. Also, Silver futures rose to $29.705 per ounce. The white metal fell about 4% last week, but silver prices are still up over 23% since the beginning of the year. 

According to the results of the economic calendar, this will be a critical week as the US Consumer Price Index (CPI) for May will be released on Wednesday. Economists are expecting a reading of 3.4%, unchanged from the previous month. Also, the Federal Reserve will hold its two-day Federal Open Market Committee (FOMC) policy meeting. Furthermore, the US central bank is expected to leave interest rates unchanged in the 5.25% to 5.5% range. What matters is what Fed Chair Jerome Powell tells reporters at the post-meeting press conference. 

Meanwhile, a steady inflation reading, and signals of upcoming rate cuts could be enough to boost gold prices. 

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    In the meantime, in other economic developments, the New York Fed’s survey of consumer expectations sees one-year inflation expectations at 3.2%, down from a forecast of 3.3% in April. However, the three-year outlook was unchanged at 2.8%, and the five-year horizon was up from 2.8% to 3%. Also, Producer prices and export and import prices will be released this week. 

    On the other hand, US Treasury yields were mixed on Monday, with the 10-year yield rising 3.3 basis points to 4.461%. Furthermore, the 2-year yield was little changed at 4.67%, while the 30-year yield held steady above 4.59%. As is known, gold is sensitive to fluctuations in interest rates because it affects the opportunity cost of holding the non-yielding bullion. 

    Another factor affecting the gold market, the US Dollar Index (DXY), a measure of the US currency against a basket of other major currencies, rose to 105.28 from the opening 104.94. recently, the index has been up 4% since the beginning of the year. As is known, a stronger US dollar is bad for dollar-priced commodities because it makes them more expensive for foreign investors to buy. 

    Gold Price Forecast and Analysis Today: 

    After the price of gold fell by 3.5% on Friday, the largest daily decline since November 2020. The price is trying to rebound higher, but its gains did not exceed the level of $ 2312 per ounce, which is stable around it at the time of writing the analysis. According to the performance on the daily chart, the resistance of $ 2355 per ounce will remain the most important for bulls in regaining control of the path. As we mentioned before, the price of gold may continue to move with a downward bias in narrow ranges until the US dollar and markets react to the announcement of US inflation figures and the US Federal Reserve policy statement. Currently, the stability of the price of gold below the $ 2300 level will continue to support the bears' control. Eventually, we still prefer to buy gold from every downward level, and the most appropriate to do so currently is $ 2265 and $ 2248, respectively. 

    Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out. 

    Mahmoud Abdallah
    About Mahmoud Abdallah
    Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.

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