Gold price has experienced a recent decline after its upward trajectory since October 17. Despite geopolitical tensions, such as the conflict between Israel and Hamas, that typically drive up gold demand as a safe-haven asset, the current market exhibits a more tempered risk appetite.
The US Dollar Index (DXY) has been on the rise, reaching around 106.30, supported by buoyant US Treasury yields. Particularly, the 10-year US Treasury yield has climbed to 4.98%, marking a notable increase.
Strong domestic economic indicators from the previous week have potentially bolstered the US dollar. Positive employment figures indicate a robust job market, with weekly initial jobless claims at their lowest levels since the beginning of the year. However, the real estate sector is facing challenges, as existing home sales have dropped to a decade-low, signaling potential headwinds for the sector.
Federal Reserve officials’ recent statements have provided some clarity on monetary policy. Raphael Bostic from the Atlanta Fed and Patrick Harker from the Philadelphia Fed have both indicated a reluctance to consider rate reductions until the middle of next year. Loretta Mester, the President of the Cleveland Fed, mentioned that the central bank is approaching its peak for rate hikes, but upcoming data could influence future monetary decisions. Federal Reserve Chairman Jerome Powell also emphasized that immediate rate hikes are not imminent but noted the possibility of monetary tightening based on strengthened growth indicators.
Market participants are closely monitoring upcoming US economic data, including the US S&P Global PMI release on Tuesday and the Q3 Gross Domestic Product (GDP) report on Thursday. These data points will significantly influence market sentiment and provide deeper insights into the overall macroeconomic health of the US.
In today’s gold trading, the price initially dipped below the 1977.25 threshold, indicating a potential bearish pivot. However, there has been a subsequent recovery attempt driven by positive momentum in the stochastic indicator. To regain a bullish trend, gold price needs to surpass the 1977.25 barrier and target the next bullish level at 2016.90.
The EMA50 metric continues to support a proposed bullish trajectory. It is important to note that a failure to exceed the 1977.25 level could lead to further price downturns, potentially approaching the 1945.20 benchmark.
The projected trading range for today is expected to be between the 1960.00 support level and the 1995.00 resistance level.