GOLD Price Analysis – Dec 03, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward momentum, remained well bid around the 2,647 level and briefly reaching a high of 2,650 on the day.
However, the precious metal’s strength was largely fueled by concerns over US President-elect Donald Trump’s proposed tariff plans, ongoing geopolitical tensions, and expectations that the Federal Reserve may implement another interest rate cut this month.
Although, the slight rise in US Treasury bond yields and renewed strength in the US Dollar could dampen gold’s potential for further gains, as gold lacks the yield offered by other assets. Traders are likely to wait for more clarity on the Federal Reserve's plans for interest rate cuts before making major moves in gold.
Moving ahead, the attention is focused on important US economic data, particularly the Nonfarm Payrolls (NFP) report on Friday. Fed Chair Jerome Powell’s speech will also be closely watched for any clues about future rate changes.
In the meantime, the US JOLTS Job Openings report offer traders short-term opportunities to respond to changes in gold prices (XAU/USD).
US Dollar Strength and Fed's Mixed Signals Create Uncertainty for Gold
On the US front, the broad-based US dollar has been rising to three-day highs, pushing the pair lower. However, the stronger USD comes after the US ISM Manufacturing PMI rose to 48.4 in November, higher than the previous reading of 46.5 and the expected 47.5. This stronger-than-expected data gave the US dollar a boost.
Meanwhile, key Federal Reserve officials are weighing the possibility of further interest rate cuts. Atlanta Fed President Raphael Bostic mentioned on Monday that he is undecided about whether a rate cut is necessary in December.
However, he still believes that the Fed should continue lowering rates over the next few months. His comments suggest that the Fed may not take immediate action but is leaning toward easing in the future.
New York Fed President John Williams also pointed out that the Fed may need to cut interest rates further to achieve a neutral policy stance, as inflation and employment risks have become more balanced.
In the meantime, Fed Governor Christopher Waller stated that he is leaning toward supporting a rate cut in December, expecting inflation to continue easing toward the Fed's 2% target. These mixed signals from Fed officials add uncertainty to the outlook for US monetary policy.
Therefore, the rising US dollar and mixed signals from Fed officials about rate cuts create uncertainty, limiting gold's upside. If the Fed moves toward rate cuts, it could support gold, but a stronger dollar may cap further gains.
GOLD (XAU/USD) – Technical Analysis
Gold prices continue to show resilience, edging up 0.33% to $2,647.74 as of the latest trading session. The metal has managed to sustain itself above the critical pivot point at $2,636.59, supported by a moderately bullish sentiment on the 4-hour chart.
With the 50 EMA holding steady at $2,643.11, the short-term trend suggests potential upward momentum, though further confirmation is required.
Immediate resistance lies at $2,666.19, which aligns with the projected take-profit level for intraday traders. A break above this level could expose $2,686.59, followed by the key psychological threshold of $2,704.92.
On the downside, immediate support rests at $2,622.74, with further declines potentially testing $2,604.95 and $2,586.53. Traders are advised to monitor these levels closely as a breach could signal a deeper retracement.
Technical indicators present a mixed outlook. The RSI hovers around 50, indicating a neutral sentiment with room for directional movement depending on price action. The market's sensitivity to upcoming economic data and geopolitical developments could play a pivotal role in defining the trend this week.
Given the current setup, a buying opportunity emerges above $2,636, targeting $2,666 while maintaining a disciplined stop-loss at $2,620. This strategy balances the ongoing bullish undertone with the potential for temporary retracements.
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GBP/USD Price Analysis – Dec 02, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair fell, slipping below the 1.2700 mark, as the US Dollar gained strength following President-elect Donald Trump's threats against the BRICS trading bloc.
Trump announced that he would impose 100% tariffs on BRICS countries if they tried to create a new currency to replace the US Dollar. This threat added strength to the US Dollar, further supporting the Greenback’s position.
US Dollar Strengthened by Trump's Stance Against BRICS
Donald Trump's comments on social media sparked concerns about trade tensions. He criticized the BRICS nations' plan to create a new currency that could challenge the US Dollar's dominance in global trade.
Trump said that these countries must promise not to create a new currency or back any other currency to replace the US Dollar, or they would face 100% tariffs.
His strong statement helped strengthen the US Dollar, which put pressure on the GBP/USD pair. The threat of tariffs made investors more cautious, supporting the Greenback while causing the Pound to weaken.
Pound Sterling Finds Support in UK Housing Data
Despite the initial decline, the cable currency regained some ground after the release of Nationwide Housing Price data, which showed a year-over-year rise of 3.7% in November, beating expectations of 2.4%.
On a seasonally adjusted basis, housing prices increased by 1.2% month-over-month, significantly higher than the forecasted 0.2% growth.
Therefore, the data offered temporary relief to the Pound as it highlighted underlying resilience in the UK housing market.
Interest Rate Cuts Expected from BoE and Fed: Impact on GBP/USD
Investors are closely watching interest rate decisions from both the Bank of England (BoE) and the US Federal Reserve (Fed), as these are major drivers of currency valuations.
Both central banks are expected to cut interest rates at their December meetings, with inflation easing in both the UK and the US.
The swaps market suggests a 60% chance of a 0.25% rate cut by the BoE, while the CME FedWatch tool shows a 67% probability of a similar cut by the Fed.
Therefore, the lower interest rates can make a currency less attractive to investors since they reduce returns on investments, which can lead to lower foreign capital inflows.
As a result, the Pound and US Dollar may face downward pressure, limiting volatility in the GBP/USD pair.
GBP/USD – Technical Analysis
The GBP/USD pair is trading at $1.2692, showing cautious consolidation near the pivot point at $1.26758. The pair reflects indecision, with price movement closely aligned to key technical levels.
Immediate resistance stands at $1.27486, followed by $1.28086 and $1.28575. A breakout above $1.27486 could attract further bullish momentum, supported by the 50-day EMA at $1.26473, which reinforces underlying support.
On the downside, immediate support is identified at $1.26175, with further critical levels at $1.25669 and $1.25072. The Relative Strength Index (RSI) is neutral at 50, indicating a balance between bullish and bearish forces. A sustained move below $1.26758 could drive prices toward $1.26175 and signal a broader bearish sentiment.
While the broader trend remains uncertain, the pair's proximity to its pivot point suggests a critical juncture. Bulls must reclaim $1.27486 for a potential rally, while failure to hold above $1.26758 may lead to downside risks.
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- GOLD Price Analysis – Dec 02, 2024
GOLD Price Analysis – Dec 02, 2024
Daily Price Outlook
Gold (XAU/USD) remains under pressure, hovering around the 2,630 level, with an intra-day low of 2,621 on Monday.
However, the reason for this decline is the recent rebound in the US Dollar, fueled by rising expectations that US President-elect Donald Trump's tariff plans could trigger inflationary pressures.
This, in turn, reduces the likelihood of near-term Federal Reserve (Fed) interest rate cuts. Therefore, the stronger dollar, along with rising US Treasury bond yields, has pushed gold lower.
US Dollar Strength and Geopolitical Tensions Impact Gold Prices
On the US front, the US dollar has regained strength after hitting its lowest point since November 12, driven by rising US Treasury bond yields.
This has put pressure on gold, as the stronger dollar reduces the appeal of gold priced in USD. Furthermore, Trump’s tariff plans, particularly targeting BRICS nations, are fueling concerns that they could ignite a trade war and push inflation higher, reducing the likelihood of Fed rate cuts.
In addition to the economic outlook, the increasing geopolitical tensions continue to support gold’s safe-haven demand.
However, the ongoing Russia-Ukraine war remains unresolved, and recent airstrikes by Russian and Syrian jets on Syrian rebels have intensified tensions in the region.
These events contribute to investor uncertainty, supporting demand for gold as a store of value during times of global instability.
China’s Manufacturing Improvement and Key US Economic Data Could Impact Gold Prices
In Asia, China’s manufacturing sector showed signs of improvement. The official Manufacturing PMI rose slightly to 50.3 in November, while the Caixin PMI surged to 51.5, suggesting stronger private-sector expansion.
Investors hope that China may introduce additional stimulus measures to support economic growth, which could influence global market sentiment.
Looking ahead, market participants will be watching key US economic data, particularly the ISM Manufacturing PMI and the upcoming Nonfarm Payrolls (NFP) report.
These data points could provide clues about the Fed's future actions, which will directly impact both the US dollar and gold prices.
If the data suggests a stronger economy, the Fed may be less likely to cut rates, which would likely strengthen the USD further, putting more pressure on gold.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues its downward trajectory, trading at $2,625.41, down 0.92% on the day. The metal struggles to regain its footing as bearish sentiment dominates, with the price hovering below the critical pivot point at $2,645.48.
Immediate resistance is located at $2,655.31, with further hurdles at $2,669.37 and $2,686.59. A breakout above these levels could signal a short-term recovery; however, the 50-day EMA at $2,639.84 reinforces resistance, adding to the downward pressure.
On the downside, immediate support rests at $2,624.17, followed by deeper levels at $2,604.95 and $2,590.40. A sustained break below $2,624.17 could lead to further declines, targeting the next critical support at $2,590.40. The RSI at 38 reflects bearish momentum, signaling oversold conditions but with room for additional downside unless buyers step in.
The broader outlook remains cautious, as gold’s inability to reclaim the pivot point indicates ongoing bearish sentiment. Traders should watch for a decisive move above $2,645 to confirm bullish potential. Otherwise, failure to hold above immediate support could invite additional selling pressure.
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- EUR/USD Price Analysis – Dec 02, 2024
EUR/USD Price Analysis – Dec 02, 2024
Daily Price Outlook
The EUR/USD pair is facing some selling pressure, dropping to around 1.0514 and hitting an intra-day low of 1.0496, as the US dollar strengthens during the early hours of European trading on Monday.
Investors will be watching closely for European Central Bank President Christine Lagarde's speech and the release of the US ISM Manufacturing Purchasing Managers' Index (PMI) later today.
Although the losses in the EUR/USD pair could be short-lived, the rise in inflation in the Eurozone above the European Central Bank's target is putting increasing pressure on the ECB to tighten its monetary policy. This could strengthen the Euro against the US Dollar, potentially pushing the EUR/USD pair higher as markets react to the inflation data.
Impact of ECB's Rate Cut Expectations and Weak Growth Outlook on the EUR/USD Pair
On the EUR front, inflation in the Eurozone, measured by the Harmonized Index of Consumer Prices (HICP), rose to 2.3% year-on-year (YoY) in November, up from 2.0% in October.
This increase met market expectations but went beyond the European Central Bank's (ECB) target of 2.0%.
Meanwhile, the Core HICP, which excludes volatile items like food and energy, climbed by 2.8% YoY in November, slightly higher than the previous reading of 2.7%, also in line with expectations.
Despite this rise in inflation, the market has already priced in a 25 basis point (bps) rate cut from the ECB in December, which would mark the bank's fourth rate reduction this year.
However, expectations for a larger 50 bps cut have been fading. This change in outlook is due to some improvement in the Eurozone's growth forecast, although it remains weak.
As a result, the market's reduced expectations for aggressive rate cuts are limiting any significant movement in the Euro.
The ECB's expected rate cut is still putting pressure on the Euro, as it signals the bank's ongoing efforts to support the struggling economy.
As a result, the Euro has faced some selling pressure, which could continue in the near term as market participants adjust to the ECB's policies and the overall economic outlook.
Therefore, the ECB's expected rate cut and weaker growth outlook are putting pressure on the Euro, likely leading to further selling of EUR.
This could result in continued downward movement for the EUR/USD pair as investors adjust to the ECB's policies.
Impact of the Fed's Cautious Approach on the US Dollar and EUR/USD Pair
On the US front, the Federal Reserve (Fed) is taking a cautious approach, which is likely to support the strength of the US Dollar.
Fed Chair Jerome Powell recently stated that the economy isn’t showing signs that would require a quick decision to lower interest rates.
He also mentioned that the current economic strength gives the Fed the flexibility to make decisions carefully.
As a result, the Fed is not rushing into rate cuts, which helps maintain investor confidence in the US Dollar. Powell's comments suggest the central bank will continue to closely monitor economic data before making any drastic changes.
This cautious stance provides stability to the US Dollar, as investors are less concerned about major rate cuts in the near future.
Market expectations indicate a nearly 65.4% chance that the Fed will reduce rates by a quarter point in December, according to the CME FedWatch Tool.
However, with the economy showing resilience, the Fed’s more measured approach means the US Dollar could remain supported, limiting any sharp decline. As a result, the US Dollar’s strength may continue to weigh on the EUR/USD pair.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05217, down 0.50%, reflecting sustained bearish momentum. The currency pair remains below its critical pivot point at $1.05657, signaling continued downside pressure.
Immediate resistance is seen at $1.05973, with further hurdles at $1.06321. These levels are pivotal, as a breakout above $1.05973 could signal a reversal of the bearish trend. However, the 50-day EMA at $1.05339 reinforces near-term resistance, limiting upward potential.
On the downside, immediate support rests at $1.04983, followed by deeper levels at $1.04690 and $1.04332. The RSI at 40 indicates bearish sentiment, though it is not yet in oversold territory, leaving room for further declines.
A sustained break below $1.04983 could accelerate selling pressure, targeting the $1.04690 support level, while failure to breach resistance suggests continued consolidation within the current range.
The broader technical outlook remains bearish as long as EUR/USD trades below $1.05657. Traders should monitor key support levels to gauge the extent of downside risk.
A decisive move above the pivot point could shift sentiment and attract bullish interest, but caution is warranted given the current downward trend.
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GOLD Price Analysis – Nov 29, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward trend, staying well-bid near the $2,661 level and even touching an intraday high of $2,666 on Friday. This upward momentum is fueled by growing concerns about the impact of US President-elect Donald Trump's trade tariffs on global economic growth.
Moreover, the ongoing Russia-Ukraine war has pushing investors to gold as a safe asset. Further supporting the bullish trend are falling US Treasury yields and a dip in the US Dollar to a two-week low, both of which make the precious metal more attractive to buyers.
Apart from this, there are worries that US President-elect Donald Trump's policies could push inflation higher again, and that efforts to reduce inflation in the US stalled in October. This could stop the Federal Reserve from cutting interest rates further.
If that happens, US bond yields might not drop much more, and the US Dollar could get some support. This means gold's price might not keep rising easily. Investors should be careful before making new bullish bets on gold.
US Dollar Struggles Amid Mixed Fed Outlook and Inflation Concerns, Boosting Gold
On the data front, the broad-based US Dollar is struggling to build on modest gains from Thursday. Traders are now betting on a 70% chance that the Federal Reserve will cut interest rates in December.
The uncertainty comes after the release of minutes from the November FOMC meeting, which showed that committee members were divided on how much further interest rates should be cut. This mixed view from the Fed has left traders unsure about future rate decisions.
In addition, data from the US Personal Consumption Expenditures (PCE) index showed that progress in lowering inflation stalled in October.
This is adding to concerns that inflation might remain stubbornly high. Investors are also expecting that US President-elect Donald Trump's policies could push inflation up again, which may prevent the Federal Reserve from making any further rate cuts. This could limit the US Dollar’s ability to rise further.
Meanwhile, the US Treasury bond yields are facing resistance in falling even further. The 10-year US Treasury yield hit a two-week low on Wednesday due to expectations that Trump’s Treasury Secretary nominee, Scott Bessent, may prioritize controlling US deficits.
This creates uncertainty around the economic outlook for 2025, as it could impact both inflation and the bond market.
Therefore, the uncertainty surrounding the US Dollar and inflation, along with the Fed's cautious stance, could support gold prices as investors seek safe-haven assets. Gold tends to benefit from lower interest rates and a weaker US Dollar, making it more attractive.
Geopolitical Tensions and Fed Uncertainty Boost Gold’s Safe-Haven Appeal
On the geopolitical front, the ongoing Russia-Ukraine war is creating uncertainty, making investors cautious.
Russia’s recent threat to use hypersonic missiles to target decision-making centers in Ukraine has raised tensions even more. As a result, many investors are turning to safe-haven assets like gold for protection.
Meanwhile, the risk of further conflict is driving up demand for gold, which is seen as a stable investment during times of geopolitical instability.
This increased demand could support higher gold prices, as investors look for safer options to protect their investments from the growing risks and market volatility caused by the war.
As a result, gold prices are likely to remain supported in the short term. Therefore, the combination of geopolitical instability and the Fed's cautious outlook on interest rates means investors are more likely to turn to gold for protection against potential market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,660.84, up 0.88% in today’s session as the metal regains momentum above its key pivot point at $2,655.33. Supported by the 50-day EMA at $2,650.33, this level is critical for maintaining the bullish outlook.
Immediate resistance is positioned at $2,669.37, followed by higher hurdles at $2,686.49 and $2,701.56. A decisive break above these levels could signal an acceleration in the uptrend.
On the downside, key support is located at $2,635.82, with additional cushions at $2,624.17 and $2,605.31. Failure to hold these levels could lead to a deeper retracement, although strong buying interest near $2,624.17 may limit downside risks.
The RSI stands at 57, reflecting moderate bullish momentum without entering overbought territory. This leaves room for further gains if buyers maintain control. Gold's movement above the $2,655.33 pivot point confirms a bullish bias, supported by strong technical structure.
For traders, buying opportunities above $2,655 could target $2,685 in the short term, with a stop-loss set near $2,637 to manage risks. Watch for a breakout above $2,669.37 for signs of stronger upward momentum.
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S&P500 (SPX) Price Analysis – Nov 29, 2024
Daily Price Outlook
The global market sentiment has been flashing red, as seen in the bearish performance of the S&P 500 index, which hit an intra-day low of 5,984.
The primary reason behind its downward trend can be attributed to a combination of geopolitical risks, economic uncertainties, and the Federal Reserve's cautious stance on interest rate cuts.
Geopolitical Tensions Weighing on Investor Confidence
However, one of the key factors influencing the bearish trend of the S&P 500 index is the ongoing Russia-Ukraine war. The prolonged conflict has led to rising uncertainty in the market, with investors fleeing to safe-haven assets like gold.
However, the recent developments, such as Russia's warning of potential hypersonic missile strikes on Ukraine, have added to the already tense situation, amplifying investor concerns.
These geopolitical risks are pressuring global equity markets, including the S&P 500, as investors become more cautious amid the potential for further escalation.
In addition, US President-elect Donald Trump's policies are raising concerns, particularly his stance on trade.
The announcement of increased tariffs on Chinese goods has heightened fears of a trade war, which could dampen global economic growth and affect corporate earnings.
The S&P 500, heavily influenced by global trade dynamics, is especially vulnerable to such risks, contributing to its downward movement.
Uncertainty Over Fed’s Rate Cuts Contributes to S&P 500 Weakness and Market Instability
On the domestic side, the Federal Reserve's careful approach to cutting interest rates has contributed to the S&P 500's weak performance.
Despite robust consumer spending and economic growth, the latest data from the US Personal Consumption Expenditures (PCE) Index shows little progress in reducing inflation.
This has led to uncertainty over the Fed’s next move, with market participants unsure about whether the central bank will cut rates in the coming months.
The minutes from the November Federal Open Market Committee (FOMC) meeting showed that Fed officials have different opinions on how much to cut rates in the future.
Some are worried about inflation staying high, while others are hopeful that the Fed can reach its target.
This confusion about the Fed’s next steps has caused market instability, with investors uncertain about the economy in 2025.
S&P 500 – Technical Analysis
The S&P 500 Index (SPX) is trading at $5,998.73, down 0.38%, as bearish momentum intensifies following a break below the $6,015 pivot point. Immediate support lies at $5,965, with deeper cushions at $5,923 and $5,887.
These levels are critical for traders monitoring potential downside risks. The 50-day EMA at $5,954.14 aligns closely with the next support zone, reinforcing its significance.
On the upside, immediate resistance is marked at $6,055, with higher targets at $6,085 and $6,120. A move above $6,055 is necessary to shift sentiment and reestablish bullish momentum.
The RSI stands at 60, reflecting moderately bullish conditions despite the recent dip, but sustained selling pressure could drive the index toward oversold levels.
The broader trend suggests a cautious outlook as SPX remains under its pivot. A sell entry below $6,014 with a target of $5,964 aligns with current technical patterns, while a stop-loss above $6,053 ensures risk management.
Traders should watch for a break of $6,015 to confirm further bearish moves or a recovery above this level for potential reversals.
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EUR/USD Price Analysis – Nov 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair has been facing selling pressure after reaching a fresh weekly high near 1.0580.
This upward momentum faded as the flash Eurozone Harmonized Index of Consumer Prices (HICP) for November showed a month-on-month decline in price pressures, which weighed on the Euro.
At the same time, the US dollar saw a rebound, which pushed the pair back below 1.0600, with the USD regaining some strength in a shortened holiday week.
EUR/USD Faces Pressure as Weak Economic Data Fuels ECB Rate Cut Expectations
On the data front, the flash Eurozone Harmonized Index of Consumer Prices (HICP) data for November showed a drop in price pressures. The monthly headline HICP decreased by 0.3%, while core HICP, which excludes food and energy prices, fell by 0.6%.
This weak data sparked expectations that the European Central Bank (ECB) might cut interest rates by 50 basis points in its December meeting. So far, the ECB has already lowered its Deposit Facility Rate by 75 basis points this year, to 3.25%.
Apart from this, the weak German Retail Sales data for October showed a larger-than-expected decline of 1.5%, after a 1.2% increase in September. Economists had predicted a smaller drop of 0.3%.
On a year-on-year basis, Retail Sales grew by just 1%, far below the expected 3.2% and slower than the previous month's 3.8%. These figures raised concerns about consumer spending and added to the speculation of a potential ECB rate cut.
Meanwhile, ECB officials, like François Villeroy de Galhau, have hinted at the possibility of a large interest rate cut. In his speech on Thursday, he mentioned that the ECB might reduce rates in December, depending on economic data and risks.
Traders are currently expecting the ECB to cut rates by at least 25 basis points in December, and further cuts are anticipated through 2025, pushing the Deposit Facility Rate down to 1.75% by the end of next year.
US Dollar Rebounds as Markets Anticipate Economic and Monetary Policy Shifts
On the US front, the US Dollar rebounded in a holiday-shortened week and the US Dollar Index (DXY), which tracks the USD against six major currencies, recovered from early losses, rising to around 106.00 after dipping to a two-week low of 105.60 on Friday.
However, the rebound began on Monday after US President-elect Donald Trump nominated Scott Bessent, a veteran hedge fund manager, as Treasury Secretary.
Markets expected Bessent to carry out Trump’s economic plans without affecting foreign relations or fiscal policy. In an interview with the Financial Times, Bessent explained that he plans to slowly introduce tariffs and reduce the budget deficit by cutting spending, without causing a big rise in inflation.
On the monetary policy front, experts believe the Federal Reserve (Fed) will be cautious about cutting interest rates, as the core Personal Consumption Expenditures Price Index (PCE) showed increased inflation in October. However, the likelihood of a 25 basis point rate cut in December stands at 66%, with the rest expecting no change.
Therefore, the rebound of the US dollar, driven by expectations of fiscal policy changes and cautious Fed rate cuts, strengthened the USD, putting downward pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05697, up 0.17% for the session, as the pair shows signs of sustained bullish momentum above the $1.05590 pivot point. Immediate resistance is positioned at $1.06071, aligning with the next key target of $1.06457.
A breakout above these levels could drive further gains toward $1.06811, signaling continued optimism in the euro.
On the downside, immediate support rests at $1.05269, followed by $1.04983 and $1.04597, with the 50-day EMA at $1.05161 providing dynamic support to the pair. A breach below these levels could shift the sentiment bearish, with increased selling pressure likely if $1.04983 fails to hold.
The RSI stands at 61, indicating moderate bullish momentum without nearing overbought territory, which leaves room for additional upside. The price action suggests a favorable outlook for buyers if the pair sustains its position above $1.05590.
Traders may look to enter long positions above $1.05583, targeting $1.06070, while maintaining a stop-loss at $1.05210 for prudent risk management.
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GOLD Price Analysis – Nov 28, 2024
Daily Price Outlook
Gold price (XAU/USD) managed to reverse its earlier downward trend and gained some positive momentum, hovering around the 2,646 level and reaching an intraday high of 2,647.
Investors are still worried about the potential impact of US President-elect Donald Trump's tariff plans on the global economy.
On top of that, the ongoing Russia-Ukraine conflict continues to add to the uncertainty. These concerns are keeping gold in demand as a safe-haven asset, helping it maintain its bullish traction.
Despite gold’s attempt to maintain its bullish momentum, its upside remains limited as the US Dollar found fresh support.
The Federal Reserve’s likely slower pace of rate cuts, backed by upbeat US economic data earlier this week, pushed US Treasury yields slightly higher, boosting the Dollar’s appeal.
This limited the upside for the non-yielding metal. On top of that, a more optimistic market mood and quieter trading due to a US holiday kept gold bulls from making any bold moves.
US Dollar Strengthens Amid Positive Economic Data, But Gold Holds Firm on Inflation Concerns
On the US front, the US Dollar gained strength, supported by expectations that the Federal Reserve may slow its pace of interest rate cuts. This optimism came after Wednesday’s positive economic data.
The Personal Consumption Expenditures (PCE) Price Index, a key inflation measure, rose to 2.3% in October from 2.1% in September. Core PCE, excluding food and energy, also climbed to 2.8%.
The economy grew at a robust 2.8% annual rate in the third quarter, driven by strong consumer spending, which surged by 3.5%. Unemployment claims fell slightly to 213,000, reflecting a stable job market, though Durable Goods Orders missed expectations, showing a modest 0.2% rise.
Despite the stronger US Dollar and higher Treasury yields, which typically put pressure on Gold, the precious metal continued to hold its ground as concerns about inflation, especially with President-elect Donald Trump’s potential policies, kept Gold in demand as a safe-haven asset.
Besides this, the Federal Reserve’s indication that it might pause rate cuts if inflation stays high also provided some support for Gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,632.48, down 0.14%, as bearish momentum continues to weigh on prices below the $2,633.90 pivot point. The 4-hour chart indicates a cautious market, with immediate resistance at $2,646.32, followed by $2,655.97.
The 50-day EMA at $2,653.22 reinforces this resistance zone, making it a critical barrier for any recovery. A breakout above these levels could pave the way toward bullish momentum, targeting $2,663 and beyond.
On the downside, immediate support is observed at $2,625.31, with further declines pointing to $2,590.17 and $2,576.56. The RSI at 45 reflects mild bearish sentiment, though it has yet to reach oversold conditions, leaving room for further downside pressure.
The current setup suggests that gold’s near-term trajectory hinges on a decisive move above $2,636.56 or below $2,624. A break above the pivot could trigger buying momentum, targeting $2,653, while a sustained drop below $2,615 would likely accelerate selling pressure.
Traders should monitor these key levels closely. The recommended strategy includes buying above $2,624 with a take-profit target at $2,653 and a stop-loss at $2,615 to manage downside risks effectively.
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AUD/USD Price Analysis – Nov 28, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair managed to halt its downward trend and regained some traction around the 0.6505 level, reaching an intraday high of 0.6510.
This uptick was largely driven by a brief bounce in the US Dollar, which had fallen to a two-week low previously. However, the US dollar quickly regained positive momentum, aided by recent US economic data.
The data highlighted a resilient economy and slower progress in inflation, which suggests that the Federal Reserve may adopt a more cautious approach towards further rate cuts. This outlook helped lift US Treasury yields, boosting demand for the USD and putting some pressure back on the AUD/USD pair.
US Dollar Rebounds on Strong Economic Data and Inflation Outlook, Pressuring AUD/USD
On the US front, the broad-based US dollar maintained its upward trend and bounced back from a two-week low, thanks to stronger economic data.
The US economy showed resilience with signs of slowing inflation, which suggests that the Federal Reserve might be more cautious about cutting interest rates further. This helped push US Treasury bond yields higher, boosting demand for the dollar.
On the data front, the latest US economic reports played a key role in this shift. The Personal Consumption Expenditures (PCE) Price Index rose to 2.3% in October, up from 2.1% in September.
The core PCE, which excludes food and energy prices, also saw a slight increase, rising to 2.8% from 2.7%. Meanwhile, US GDP grew at a healthy 2.8% annual rate in the third quarter, driven by strong consumer spending, which rose by 3.5%. Jobless claims also fell by 2,000 to 213,000, signaling a solid labor market.
However, there was a slight disappointment with October's Durable Goods Orders, which only rose by 0.2%, missing expectations of a 0.5% increase.
Excluding transportation, the rise was even smaller, at 0.1%. Despite this, concerns over inflation and the potential impact of future policies under President-elect Donald Trump, combined with the latest Federal Reserve minutes, gave the dollar an edge.
The rebound in US Treasury yields also helped support the dollar, putting some upward pressure on AUD/USD pair.
AUD/USD Faces Pressure Amid Economic Concerns and Global Tensions, But RBA's Hawkish Stance Provides Support
On the other hand, the gains in the AUD/USD pair were also supported by stronger-than-expected data on Private Capital Expenditure in Australia. Australia's new capital expenditure rose by 1.1% in the third quarter, surpassing market expectations of a 0.9% increase.
This rebound followed a 2.2% decline in the previous quarter, showing some strength in the Australian economy. However, despite this positive data, the Australian Dollar remained subdued against the US Dollar, partly due to reduced trading activity ahead of the US Thanksgiving holiday.
Looking ahead, the AUD/USD pair may face downward pressure as the US plans to introduce new measures aimed at limiting China’s progress in artificial intelligence technology.
Given the strong trade links between Australia and China, any economic changes in China could have a significant impact on Australian markets, possibly weakening the Australian Dollar.
Furthermore, the market sentiment was dampened after President-elect Donald Trump's announcement of a 10% tariff hike on all Chinese goods entering the US.
However, the downside for the AUD was limited by the Reserve Bank of Australia's (RBA) hawkish stance on future interest rates. Australia's monthly Consumer Price Index (CPI) rose by 2.1% year-over-year in October, staying within the RBA's target range of 2-3%.
Although this was slightly below expectations of 2.3%, it marked the lowest inflation rate since July 2021 and helped support the Australian Dollar in the face of global economic concerns.
AUD/USD – Technical Analysis
AUD/USD is trading at $0.64824, down 0.21%, as bearish sentiment continues to dominate below the $0.65014 pivot point. The 4-hour chart indicates immediate resistance at $0.65918, with additional barriers at $0.66399.
The 50-day EMA at $0.64987 reinforces short-term resistance, limiting upward momentum. A breakout above $0.65456, the key pivot level, would be required to shift the bias toward bullish territory, potentially targeting $0.65918 and beyond.
On the downside, immediate support is found at $0.64497, with further declines targeting $0.64154 and $0.63763. The RSI at 48 suggests a neutral stance, leaning slightly bearish, with no immediate oversold signals. However, continued pressure below the pivot could drive the pair toward lower support zones.
Current trends suggest sellers remain in control, especially if the price sustains below $0.65052. Traders are advised to consider selling below this level, with a take-profit target at $0.64488 and a stop-loss at $0.65504 to manage risk.
The short-term outlook hinges on whether AUD/USD can break above the $0.65456 pivot.
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USD/JPY Price Analysis – Nov 28, 2024
Daily Price Outlook
During the European trading session, the USD/JPY pair is seeing a modest rise as US dollar gained traction, supported by a slight increase in US Treasury bond yields.
However, the recent US economic data has shown that the economy remains resilient, with inflation progress slowing down.
This has led to expectations that the Federal Reserve might hold off on further rate cuts, which is boosting demand for the US Dollar. The uptick in bond yields is also helping the greenback gain strength, putting pressure on the lower-yielding Japanese Yen.
On top of this, a generally positive market sentiment is driving investors away from the safe-haven JPY, further supporting the USD/JPY's climb.
However, concerns about US President-elect Donald Trump’s tariff plans, geopolitical tensions like the ongoing Russia-Ukraine conflict, and speculation that the Bank of Japan (BoJ) might raise interest rates in December are providing some support for the Yen.
Traders are also staying cautious, awaiting Tokyo’s consumer inflation figures on Friday before making new moves.
Japanese Yen Strengthens on Inflation Data and BoJ Rate Hike Expectations, Pressuring USD/JPY
On the JPY front, Japan's Consumer Price Index (CPI) and steady corporate service inflation are giving confidence to Bank of Japan (BoJ) Governor Kazuo Ueda’s view that the economy is moving towards sustained, wage-driven inflation. This has kept the possibility of another interest rate hike by the BoJ in December on the table.
As a result, the Japanese Yen has strengthened, reaching a five-week high against the US Dollar on Wednesday. This rise in the Yen is also supported by concerns over trade wars, making the Yen a more attractive safe-haven currency during uncertain times.
Meanwhile, Japan's parliament has started an extraordinary session. Prime Minister Shigeru Ishiba's minority government is aiming to pass a supplementary budget to support households struggling with inflation.
The government is also working on revising laws related to political funds to address ongoing economic challenges.
Therefore, the strengthening Japanese Yen, fueled by BoJ's potential rate hike and trade war concerns, is weighing on the USD/JPY pair. This shift towards the Yen as a safe-haven currency has led to a pullback in the USD/JPY pair.
US Dollar Rebounds as Strong Economic Data and Inflation Concerns Support USD/JPY
On the US front, the broad-based US dollar is recovering from a two-week low, supported by a rise in US bond yields. This rebound follows strong economic data that highlighted the resilience of the US economy, including a solid labor market.
On the other hand, the Bureau of Economic Analysis reported that the US economy grew at a 2.8% annualized rate in the third quarter, in line with earlier estimates. Consumer spending also rose by 3.5%, the highest increase this year.
Moreover, the US Department of Labor revealed that new unemployment claims fell to 213,000 for the week ending November 22, down from 215,000 the previous week.
On the other hand, Durable Goods Orders increased by just 0.2% in October, missing the expected 0.5% rise and showing a slowdown compared to the previous month’s revised 0.4% decline.
Furthermore, the Personal Consumption Expenditures (PCE) Price Index, which is closely watched by the Federal Reserve, rose to 2.3% in October from 2.1% in September, while the core PCE also edged up to 2.8%.
Despite these data points, market expectations for a Fed rate cut in December remain, but growing inflation concerns from President Trump's policies are supporting the USD and pushing the USD/JPY pair higher.
USD/JPY – Technical Analysis
USD/JPY is trading at 151.532, up 0.32%, as buyers maintain momentum following recent gains. The 4-hour chart shows immediate resistance at 155.029, with higher targets at 156.740.
A critical pivot point at 153.418 marks the threshold for a potential bullish extension. The 50-day EMA at 153.927 reinforces this resistance zone, suggesting that a sustained break above this level could open the door to further gains.
On the downside, immediate support is located at 150.438, followed by deeper levels at 149.105 and 147.816. The RSI at 33 suggests the pair is nearing oversold conditions, which may limit downside potential in the near term.
However, if USD/JPY falls below 152.105, bearish momentum could accelerate, targeting the support at 150.418.
Traders should remain cautious around the current levels. A sell position below 152.105 could offer opportunities with a take-profit target at 150.418 and a stop-loss at 153.421.
Conversely, a decisive break above the pivot at 153.418 would signal renewed bullish interest, pushing toward 155.029 and beyond.
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