GOLD Price Analysis – Oct 31, 2024
Daily Price Outlook
Gold prices (XAU/USD) are experiencing slight pressure around the $2,780 mark in early European trading. This is primarily due to rising US Treasury bond yields. Additionally, there are growing expectations that the Federal Reserve may not ease interest rates as aggressively, further weighing on gold prices.
However, the decline appears limited as uncertainties surrounding the upcoming US presidential election and ongoing tensions in the Middle East continue to bolster gold's appeal as a safe haven.
Moreover, the softer tone in global stock markets is giving a slight boost to gold as cautious investors lean toward safe assets. Many traders seem to be waiting on the sidelines ahead of key US data releases, like the Personal Consumption Expenditure (PCE) Price Index and Friday’s Nonfarm Payrolls (NFP) report.
These reports are expected to offer clues about the Fed's next moves on interest rates, which could provide fresh direction for XAU/USD.
Impact of Rising Treasury Yields and Strong Economic Data on Gold Prices
On the US front, the broad-based US dollar remains bullish, fueled by a further rise in US Treasury bond yields. This uptick is partly driven by expectations that the Federal Reserve may ease interest rates less aggressively, adding downward pressure on gold prices.
However, the latest report from Automatic Data Processing (ADP) on Wednesday showed that private sector employers added 233,000 jobs in October, up from a revised 159,000 in September and beating forecasts.
This points to a strong job market, and together with other positive US economic data, it reinforces the view that the Fed may hold off on cutting rates quickly.
The US Bureau of Economic Analysis also reported that the economy grew at an annualized rate of 2.8% in the third quarter, slower than the 3% growth seen from April to June. The markets are currently expecting a 25 basis points interest rate cut from the Fed in November.
However, concerns about government spending after the US elections are pushing bond yields higher, with the 10-year US government bond yield hovering just below 4.3%, close to its highest level since July. This increase in yields boosts demand for the US Dollar, which is a bearish for gold prices.
Therefore, the rise in US Treasury bond yields and strong economic data are creating downward pressure on gold prices, as higher yields increase demand for the US Dollar, making gold less attractive. This trend may continue with upcoming economic data releases.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is currently trading at $2,784.29, down 0.11% on the day, as it hovers near a critical pivot point at $2,789.81. The precious metal is testing support levels after encountering strong resistance at $2,798.12, a zone that remains a significant barrier to any immediate upside.
Technical indicators suggest a cautious sentiment, with the Relative Strength Index (RSI) sitting at 69—just below overbought territory, signaling potential consolidation or mild correction if buying pressure weakens.
Above the pivot, gold faces resistance at $2,805.15 and $2,812.45. A breakout above these levels could renew bullish momentum, pushing prices higher if market conditions support risk-off sentiment. However, the presence of the 50-day Exponential Moving Average (EMA) at $2,745 indicates a strong underlying support level, likely to provide a floor for any downward movement.
On the downside, immediate support rests at $2,779.33, followed by more robust levels at $2,773.08 and $2,767.84. A sustained break below these supports could open the door to further declines, targeting the 50 EMA around $2,745, which could serve as a pivotal level for any significant trend shifts.
The current setup suggests a potential selling opportunity if gold fails to hold above $2,789, with a target at $2,773. However, caution is advised, as a recovery above $2,798 would invalidate this outlook and hint at renewed bullish momentum.
This balanced technical landscape calls for close monitoring of the $2,789 pivot, which will likely shape gold's short-term trajectory.
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- USD/JPY Price Analysis – Oct 31, 2024
USD/JPY Price Analysis – Oct 31, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair extended its pullback, trading around the 151.80 level as the Japanese yen gained strength.
This decline follows comments from Bank of Japan (BoJ) Governor Kazuo Ueda, who suggested a potential interest rate hike "if conditions are met."
Although the BoJ kept its benchmark interest rate at 0.25% as expected, Ueda emphasized the Bank's commitment to normalizing its monetary policy. In response to this announcement, the yen appreciated against other currencies, exerting downward pressure on the USD/JPY exchange rate.
Market participants are now turning their attention to upcoming US economic data, especially the release of the Personal Consumption Expenditures (PCE) Prices Index, which is anticipated to reflect ongoing easing of inflation toward the Federal Reserve's 2% target.
Meanwhile, traders are eagerly awaiting Friday's Nonfarm Payrolls (NFP) report, with market consensus indicating a notable decline in job additions. However, strong ADP figures have raised expectations, adding an element of uncertainty to the jobs outlook.
Cautious US Market Sentiment and Economic Data Impact on USD/JPY Outlook
On the US side, the market sentiment remains cautious as investors turned worried amid upcoming data releases. The US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly below 104.00.
Meanwhile, the upcoming Nonfarm Payrolls (NFP) report is projected to show an addition of only 115,000 jobs in October, a decrease from 254,000 in September, while the unemployment rate is expected to remain steady at 4.1%.
Investors are also keeping an eye on the US ISM Manufacturing PMI for October, which is anticipated to show a contraction but at a slower pace, moving from 47.2 in September to 47.6. These data points will likely influence market expectations for the Federal Reserve's interest rate decisions in the coming months.
Therefore, the cautious market sentiment and weaker job growth expectations may lead to a bearish outlook for the USD/JPY pair. However, the slowdown in the NFP and ISM Manufacturing PMI could prompt investors to adjust their positions, affecting the dollar's strength against the yen.
USD/JPY – Technical Analysis
USD/JPY is trading at 152.90, down 0.34% today, indicating a moderate bearish trend as the pair nears critical support levels. The pivot point is situated at 153.26, aligning closely with the 50-day Exponential Moving Average (EMA), which serves as a key resistance.
This confluence suggests that USD/JPY might encounter difficulty moving higher unless market sentiment strongly favors the dollar.
Immediate resistance is noted at 153.05, with subsequent levels at 153.58 and 153.87, potentially capping any recovery efforts. On the downside, immediate support is found at 152.74, followed by deeper levels at 152.50 and 152.28.
A break below these supports could escalate selling pressure, possibly leading to further declines.
The Relative Strength Index (RSI) stands at 40, reflecting subdued momentum. While not in oversold territory, this level implies that selling interest may persist if the pair fails to reclaim the pivot point.
Traders might consider short positions below 153.03, with a target at 152.52 and a stop at 153.42, capitalizing on the prevailing bearish outlook.
Overall, USD/JPY remains pressured below 153.26, supporting a bearish view unless a breakout above this level occurs.
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AUD/USD Price Analysis – Oct 31, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair stopped its sluggish trend, gaining positive traction around the 0.6580 level. This bullish movement came as the US dollar turned bearish, with the US Dollar Index (DXY), which tracks the dollar's value against six major currencies, slipping slightly below 104.00.
Traders are now focused on the upcoming United States Nonfarm Payrolls (NFP) data for October, as it’s expected to shape market expectations for the Federal Reserve's interest rate decisions in the months ahead.
On the AUD side, the slower-than-expected inflation growth in Australia has dampened market expectations for a rate hike by the Reserve Bank of Australia (RBA), negatively impacting the Australian dollar (AUD) as investors seek higher-yielding currencies
Cautious US Market Sentiment and Its Impact on AUD/USD Pair
On the US side, market sentiment is cautious as investors adopt a risk-averse approach ahead of the presidential elections on November 5.
Recent national polls show a tight race between former President Donald Trump and current Vice President Kamala Harris, with many traders seemingly betting on a Trump victory.
If elected, Trump is expected to implement protectionist policies that could significantly impact the US's major trading partners.
Moreover, the US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly below 104.00.
The upcoming Nonfarm Payrolls (NFP) report is projected to show an addition of only 115,000 jobs in October, a decrease from 254,000 in September, while the unemployment rate is expected to remain steady at 4.1%.
Investors are also keeping an eye on the US ISM Manufacturing PMI for October, which is anticipated to show a contraction but at a slower pace, moving from 47.2 in September to 47.6. These data points will likely influence market expectations for the Federal Reserve's interest rate decisions in the coming months.
Therefore, the cautious market sentiment and anticipated protectionist policies from a potential Trump presidency may weaken risk appetite, which could support the AUD/USD pair as a bearish US dollar makes Australian assets more appealing.
Meanwhile, disappointing US employment data may lead to a weaker dollar, further bolstering the AUD/USD exchange rate.
Impact of Slower Inflation on AUD/USD Pair
On the other side, inflation growth in Australia has been slower than anticipated in the third quarter, affecting market expectations for the Reserve Bank of Australia (RBA). As a result, traders now believe the RBA will maintain its Official Cash Rate (OCR) at current levels for a longer period.
Notably, the year-on-year Consumer Price Index (CPI) dropped significantly from 3.8% in the previous quarter to 2.8%, which was faster than analysts expected. In the meantime, the Annual Trimmed Mean CPI, which the RBA prefers to use as its inflation measure, increased by 3.5%, aligning with expectations.
Therefore, the slower-than-expected inflation growth in Australia may weaken the Australian dollar against the US dollar, as market expectations shift toward a prolonged period of stable interest rates from the RBA. This could create downward pressure on the AUD/USD pair.
AUD/USD – Technical Analysis
The AUD/USD pair is currently trading at $0.65676, down 0.06% on the day, as it remains under pressure below the pivot point at $0.66094.
The pair is struggling to gain traction amidst broader market sentiment favoring the U.S. dollar. With an RSI of 42, AUD/USD appears to be in a modestly bearish phase, indicating potential for further downside if selling momentum persists.
Immediate resistance for the pair stands at $0.65849, followed by more significant resistance levels at $0.66449 and $0.66873. A breakout above these levels would need strong buying interest, which is unlikely without supportive economic data or a shift in market sentiment.
On the downside, immediate support is located at $0.65420, with subsequent levels at $0.65092 and $0.64730. Notably, the 50-day Exponential Moving Average (EMA) is positioned at $0.66234, acting as a key barrier above the current price.
This EMA level reinforces the bearish outlook, as a sustained move below it could signal continued downside momentum.
For traders, a break below the entry price of $0.65857 could present a selling opportunity, targeting $0.65413 with a stop loss at $0.66106.
The current technical landscape suggests AUD/USD may continue its slide unless it manages to reclaim the $0.66094 pivot level, where a bullish reversal would become more likely. Traders should watch for any decisive moves below $0.65857, as it could validate further downside.
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GBP/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the GBP/USD currency pair continued its downward trend, trading sluggish around the 1.2976 level on Wednesday. This is because traders are watching closely for the United Kingdom's Autumn Forecast Statement, set to be announced at 12:45 GMT.
This marks Labour's first budget presentation in over 15 years, with Chancellor of the Exchequer Rachel Reeves expected to propose tax increases on various income sources and outline plans for higher spending to boost investment.
This could undermine the GBP as investors react negatively to such measures, fearing they could lead to slower economic growth or increased debt levels. This could contribute to further weakness in the GBP/USD pair
On the flip side, the losses in the GBP/USD pair may ease as the US dollar weakens ahead of important US economic data. The ADP Employment Change report for October and the Q3 flash GDP data will be released around 12:30 GMT, which could further impact the currency pair.
US Economic Data and Its Impact on GBP/USD Pair
On the US front, the broad-based US dollar turned bearish ahead of important economic data. As a result, the GBP/USD pair gained slightly, with investors focused on the upcoming ADP Employment Change report for October.
This report is expected to show that the private sector added 115,000 new jobs, down from 143,000 in September. However, the slowdown in job growth could worry investors about the job market, leading to increased expectations for interest rate cuts by the Federal Reserve.
Meanwhile, Tuesday’s JOLTS Job Openings data for September raised concerns about slowing job demand, as the number of new job openings was lower than expected. Investors are also looking ahead to the US Nonfarm Payrolls (NFP) data for October, which will be released on Friday, to gain more insights into the labor market.
Hence, the US economy is expected to grow steadily at a rate of 3.0% in the third quarter of the year, showing some resilience despite challenges in the job market.
Impact of UK Autumn Forecast Statement on GBP/USD Pair
Moreover, many investors are cautious about making strong moves ahead of the United Kingdom's Autumn Forecast Statement, which will be announced at 12:45 GMT.
This will be Labour’s first budget presentation in over 15 years. Chancellor of the Exchequer Rachel Reeves is expected to announce tax hikes on various income sources and outline plans for increased spending to boost investment.
According to UBS, the budget will focus on three main areas: changes to fiscal rules to allow more borrowing, a package of tax increases on capital gains, inheritance, pensions, and national insurance contributions for employers, and additional spending on investment projects.
Market participants are particularly interested in the details of the tax increases and spending plans, as these could affect inflation. Analysts at UBS believe that higher spending will likely raise the fiscal deficit to 3.1% of GDP.
This higher deficit could raise concerns about ongoing price pressures, leading traders to reconsider their expectations for the Bank of England’s (BoE) interest rate decisions for the rest of the year.
According to a recent Reuters poll, the BoE is expected to cut interest rates by 25 basis points in its upcoming meeting on November 7, bringing key borrowing rates down to 4.75%.
Therefore, the cautious investor sentiment and potential tax hikes in the UK may weaken the GBP/USD pair, as concerns over higher fiscal deficits could dampen confidence in the pound, especially if the Bank of England cuts interest rates as expected.
GBP/USD – Technical Analysis
GBP/USD is trading near the $1.29990 level, showing a slight decline and hovering just below the key pivot point at $1.30154. Immediate resistance lies at $1.30312, followed by stronger resistance at $1.30493 and $1.30644.
The Relative Strength Index (RSI) stands at 56, hinting at moderate bullish momentum but not yet in overbought territory. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $1.29753, offering a nearby support level that could reinforce bullish sentiment if tested.
A sustained move above the $1.30154 pivot could spark buying interest, potentially driving the pair toward $1.30493 and beyond. However, if prices fall below immediate support at $1.29947, traders may see further downside risk toward $1.29793 and $1.29587.
For those seeking a buying opportunity, an entry above $1.29895 with a target at $1.30320 and a stop loss near $1.29562 aligns with the current technical setup, balancing risk with potential upside. GBP/USD is positioned near its pivot with a mildly bullish outlook, with buyers likely stepping in above $1.30154.
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EUR/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend, remaining well bid around 1.0832 and reaching an intra-day high of 1.0859.
This bullish rally can be attributed to positive Eurozone growth data, which indicated that the economy surprisingly grew in the third quarter after contracting in the April-June period.
Moreover, gains in the EUR/USD pair accelerated as the bullish rally in the US dollar appeared to have slowed and faced bearish pressure following weak JOLTS Job Openings data for September.
EUR/USD Rises on Positive Eurozone GDP Data and Lower Rate Cut Expectations
On the EUR front, the shared currency gained strong bullish traction, with the EUR/USD rising strongly near the 1.0850 level. This surge is mainly due to positive Gross Domestic Product (GDP) data showing that the Eurozone economy grew unexpectedly in the third quarter after contracting earlier in the year.
In the meantime, the German economy expanded by 0.2%, surprising economists who had predicted a 0.1% decline. However, the Eurozone overall grew by 0.4% in the three months ending in September, following a 0.2% growth in the previous quarter.
Meanwhile, the bloc's GDP rose at an annual rate of 0.9% in Q3, compared to 0.6% in Q2 and the expected 0.8%. Year-on-year, German GDP contracted at a slower rate of 0.3% after flat growth in Q2. Additionally, the preliminary Harmonized Index of Consumer Prices (HICP) data for Germany showed higher-than-expected inflation.
These positive developments have reduced expectations for a significant interest rate cut by the European Central Bank (ECB) in December, with the likelihood of a 50 basis point cut now dropping to 22% from 45%. However, concerns about the Eurozone's economic outlook remain among investors.
EUR/USD Boosted by Bearish US Dollar and Weak Job Data
Another factor that has been boosting the EUR/USD pair is the bearish US dollar, which has lost its momentum following weak JOLTS Job Openings data for September, raising concerns about the labor market.
The data revealed that job openings dropped to 7.443 million, below the expected 7.99 million and down from the previous 7.861 million. This decline in job openings suggests a slowdown in labor demand and supports expectations that the Federal Reserve may keep interest rates low for the rest of the year.
Moving on, investors are looking ahead to key reports like the ADP Employment Change and the flash US Q3 GDP data, which will be released during the North American session.
Economists predict the private sector added 115,000 new jobs in October, down from 143,000 in September. Furthermore, the US economy is expected to grow at a steady annualized rate of 3.0%.
EUR/USD – Technical Analysis
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
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- GOLD Price Analysis – Oct 30, 2024
GOLD Price Analysis – Oct 30, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upward trend and hit new highs around 2,789 level on Wednesday as more investors turned to gold due to rising US political uncertainty and lower US Treasury yields.
Investors are looking for safe investments as the US presidential election gets closer, with polls showing a close race between Vice President Kamala Harris and former President Donald Trump.
At the same time, Treasury yields have dropped after a sharp decline in US job openings in September. Since the Federal Reserve closely watches the job market to decide on interest rates, this data makes a 0.25% rate cut likely next week. Therefore, these combined factors have driven up gold prices as investors seek stability.
Impact of Mixed Economic Data on Gold Prices and Market Outlook
On the US front, the broad-based US dollar lost its recent strength, turning bearish as new data showed a mixed picture of the economy. US JOLTS Job Openings fell to 7.44 million in September, with August’s number revised down to 7.86 million from 8.04 million, hinting at a weaker labor market ahead of Friday’s Nonfarm Payrolls (NFP) report.
However, consumer confidence rose significantly, with the Conference Board’s index climbing to 108.7 in October from 98.7 in September, beating expectations of 99.5 and suggesting that consumers are feeling optimistic.
At the same time, the chances of a Fed rate cut have grown, with the CME Group’s Fed Watch tool now showing a 99.6% likelihood of a 0.25% cut next week, up from 92% on Tuesday, and a 76.6% chance for another cut in December.
Besides this, 10-year Treasury yields eased from 4.33% to 4.23%, providing further support to precious metals.
The mixed economic data, including falling job openings and rising consumer confidence, alongside expectations of a Fed rate cut, are likely to boost gold prices. Lower Treasury yields also support gold as a safe-haven asset amidst economic uncertainty.
Moving ahead, the attention now turns to Wednesday’s GDP report, expected to show 3% annual growth for Q3, and ADP employment data, which is forecast to dip from 143K to 115K, potentially raising questions about the upcoming NFP report.
GOLD (XAU/USD) – Technical Analysis
Gold currently trades at $2781.47, holding above the $2782.01 pivot point amid bullish momentum. Immediate resistance lies at $2790.05, with additional hurdles expected at $2798.12 and $2805.15.
This upward momentum is supported by a high Relative Strength Index (RSI) reading of 76.00, suggesting that gold is nearing overbought conditions. The 50-day Exponential Moving Average (EMA) at $2744.78 serves as a crucial support level and confirms the uptrend, providing a solid base for potential pullbacks.
A break above $2790.05 could signal further bullish advances toward $2805.15, yet caution is warranted given the elevated RSI. On the downside, immediate support is positioned at $2773.75, with further backing at $2764.12 and $2753.97.
A failure to hold these levels might indicate a bearish correction. Traders are advised to consider a selling entry below $2782, with a target of $2769 and a stop loss at $2790, aligning with technical resistance.
Gold remains above its pivot, but traders should remain cautious due to potential overbought conditions.
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USD/CAD Price Analysis – Oct 29, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair continued its upward trend, stabilizing near the 1.3890 level. However, the Canadian Dollar (CAD), heavily influenced by commodity prices, is under pressure from declining oil prices, which pushed the USD/CAD pair down. Meanwhile, the US Dollar gains strength, bolstered by rising US bond yields.
This uptick in yields is fueled by growing market sentiment favoring Former President Donald Trump in the upcoming US presidential election, along with expectations that the Federal Reserve may take a more cautious approach regarding future interest rate cuts.
Looking ahead, investors are exercising caution in anticipation of key US economic reports this week, including the Advance Q3 GDP, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
Impact of Oil Prices and Interest Rate Cuts on the USD/CAD Pair
West Texas Intermediate (WTI) oil is currently priced around $67.50 per barrel, showing a recent drop. This decrease is mainly because fears of a larger conflict in the Middle East have eased, as military actions have been limited.
However, tensions are still high, with Iran's Foreign Ministry spokesperson suggesting that Iran may respond to Israel's recent attacks on its military targets, mentioning the use of "all available tools," according to Reuters. These geopolitical issues continue to affect oil prices and, in turn, the value of the Canadian Dollar (CAD), which relies heavily on oil.
On the economic front, Bank of Canada (BoC) Governor Tiff Macklem recently talked about the decision to cut interest rates last week. He explained that these cuts are a response to the previous high rate hikes meant to control inflation.
Macklem also emphasized the need to find a "neutral rate," which is a level that doesn't either boost or slow down the economy. His comments suggest that the central bank is carefully watching economic conditions to balance supporting growth while keeping inflation in check.
Therefore, the decline in WTI oil prices may weaken the Canadian Dollar (CAD), potentially leading to upward pressure on the USD/CAD pair. Furthermore, the Bank of Canada's rate cuts could further support the US Dollar's strength against the CAD.
USD/CAD – Technical Analysis
The USD/CAD pair is trading at $1.38970, showing a slight uptick of 0.09% for the day. With immediate price action hovering around the $1.38851 mark, USD/CAD exhibits a bullish sentiment but faces key resistance levels ahead.
The pivot point at $1.39090 stands as an important threshold, with immediate resistance seen at $1.39325, followed by $1.39567, which could attract further buying interest if breached.
On the support side, the first level is positioned at $1.38669, close to the 50-day Exponential Moving Average (EMA) of $1.38612, which serves as a critical support line for this trend.
Further downside support sits at $1.38407 and $1.38133. A dip below $1.38407 could suggest a shift in the bullish momentum, potentially leading to further declines.
The Relative Strength Index (RSI) is reading at 62, indicating a mildly bullish stance but still short of overbought territory, which provides room for potential upward movement.
With the EMA supporting the current trend and RSI maintaining healthy levels, USD/CAD appears well-positioned for continued gains if it manages to break above the $1.39090 pivot.
Traders seeking an entry position may consider buying above $1.38852, with a take-profit target near $1.39299 and a conservative stop-loss at $1.38609 to hedge against sudden downside moves.
In summary, the USD/CAD outlook remains cautiously bullish, contingent upon a sustained move above $1.39090 to signal potential for further gains. Key resistance and support levels will guide the near-term direction as market participants weigh potential movements.
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AUD/USD Price Analysis – Oct 29, 2024
Daily Price Outlook
During the European trading session, the AUD/USD currency pair continued its bearish trend, dropping to around 0.6575. This decline is largely driven by renewed buying interest in the US Dollar (USD), supported by expectations of a less aggressive approach from the Federal Reserve regarding policy easing.
On the other hand, there’s growing speculation about a possible interest rate cut by the Reserve Bank of Australia (RBA).
This speculation is partly due to anticipated consumer inflation data for Australia, set to be released on Wednesday. Analysts expect the annual inflation rate for the September quarter to drop to 2.9%, the lowest since March 2021.
These factors are putting pressure on the Australian Dollar (AUD), contributing to the selling tone surrounding the AUD/USD pair.
Moving ahead, investors seem cautious ahead of important US economic reports this week, including the Advance Q3 GDP, the Personal Consumption Expenditures (PCE) Price Index, and the Nonfarm Payrolls (NFP) report.
US Dollar Gains Momentum on Fed Expectations and Deficit Concerns
On the US front, the recent buying of the US Dollar (USD) is supported by expectations that the Federal Reserve (Fed) will take a less aggressive approach to policy easing.
However, the recent macroeconomic data suggests that the US economy is performing well, leading to increased market confidence that the Fed may implement smaller interest rate cuts throughout the year. This optimism is helping to strengthen the US dollar.
Moreover, the increasing concerns over spending plans proposed by Vice President Kamala Harris and Republican nominee Donald Trump are raising worries about a larger budget deficit.
This has contributed to higher US Treasury bond yields, which further supports the US Dollar. These factors are putting downward pressure on the AUD/USD pair, dragging it lower as traders respond to the stronger USD and ongoing economic developments.
Australian Dollar Faces Pressure Amid Inflation Expectations and Economic Developments
On the AUD front, there are growing expectations that Australia’s consumer inflation rate will come in at 2.9% for the September quarter, the lowest it has been since March 2021.
This has led to speculation about a possible interest rate cut by the Reserve Bank of Australia (RBA), which is putting additional pressure on the Australian Dollar (AUD) and dragging down the AUD/USD pair.
On the positive side, the AUD is getting some support from news that China plans to approve the issuance of over ¥10 trillion in extra debt to boost its economy, potentially starting as soon as next week.
Traders are now keeping an eye on upcoming US economic data, including the Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS), which will influence market sentiment.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) has seen a pullback, currently trading at $0.65649, marking a 0.27% decline. This downward momentum places the pair below key support and moving averages, indicating a bearish outlook in the short term.
Immediate resistance is found at $0.66097, and breaking above this could trigger a mild recovery, potentially guiding prices toward the next resistance levels at $0.66895 and $0.67227.
The pivot point rests at $0.66544, offering a significant threshold that traders will monitor closely. AUD/USD remains below its 50-day EMA, positioned at $0.66527, underscoring the continued bearish pressure.
The Relative Strength Index (RSI) is low at 28, signaling oversold conditions, which may lead to some short-term buying interest. However, the broader trend suggests caution until the pair crosses above the immediate resistance levels.
On the downside, if selling pressure intensifies, the pair could test support at $0.65498, followed by deeper support at $0.65092 and $0.64730. Traders looking to enter long positions might find buying opportunities above $0.65499, with a potential take-profit target near $0.66097 and a stop-loss set at $0.65088 to manage downside risk.
While oversold conditions suggest a possible bounce, the AUD/USD pair’s position below the pivot and 50-day EMA warrants a cautious approach. A decisive move above $0.66097 is necessary to alleviate some bearish sentiment and signal a potential recovery.
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GOLD Price Analysis – Oct 29, 2024
Daily Price Outlook
Gold prices (XAU/USD) prolonged their upward trend and remained well-bid around above the $2,750 mark.
However, the ongoing safe-haven demand driven by tensions in the Middle East and uncertainties surrounding the upcoming US elections is keeping interest in this precious metal alive. Nevertheless, several factors are limiting gold's upward movement.
On one hand, positive economic data from the US suggests a resilient economy, which supports expectations of smaller interest rate cuts from the Federal Reserve. This, in turn, bolsters US Treasury bond yields and increases demand for the US Dollar (USD).
As a result, traders are cautious about making fresh bullish bets on gold. Moreover, many investors are waiting for key US economic reports later this week.
Impact of US Dollar Strength and Economic Data on Gold Prices
On the US front, the broad-based US dollar managed to stop its previous downward rally and regained mild traction as positive economic data indicated that the economy remains resilient.
This development supports expectations for smaller interest rate cuts by the Federal Reserve (Fed). Meanwhile, investors are cautious ahead of important economic reports this week that could shed light on the Fed's future rate decisions.
Nevertheless, a recent decline in US Treasury bond yields triggered a pullback in the dollar from its highest level since July 30, allowing gold prices to attract some dip-buyers near the $2,750 mark.
Investors are now focusing on Tuesday’s economic reports, including the Conference Board's Consumer Confidence Index and the Job Openings and Labor Turnover Survey (JOLTS). These reports, along with other upcoming economic data, will influence the Fed's interest rate outlook and impact gold prices (XAU/USD).
Therefore, the recent dollar pullback and lower Treasury yields may provide gold prices with a temporary boost, attracting dip-buyers. However, uncertainty about future Fed rate decisions and key economic reports could lead to volatility and limit gold's upward momentum.
Impact of Political Uncertainty and Global Demand on Gold Prices
On the flip side, the upcoming US presidential election is creating a tense environment as Vice President Kamala Harris and Republican nominee Donald Trump are in a close race for the White House. This political uncertainty is adding volatility to the markets, as investors weigh potential outcomes.
Besides this, the US has issued a warning to Iran at the United Nations Security Council, threatening severe consequences if Iran engages in further aggressive actions against Israel. This follows recent strikes on military targets in Iran by Israel.
Meanwhile, China's gold consumption has decreased by 11.18% in the first three quarters of 2024 compared to the same period last year, as high gold prices have reduced demand for jewelry.
This decline in consumption may further impact global gold prices, adding another layer of complexity to the market dynamics.
Therefore, the political uncertainty surrounding the US presidential election and tensions with Iran could lead to increased market volatility, potentially boosting gold's appeal as a safe-haven asset. Besides this, China's declining gold consumption may further weigh on global gold prices in the near term.
GOLD (XAU/USD) – Technical Analysis
Gold prices are experiencing steady upward momentum, trading around $2,751.93 per ounce, a 0.34% increase on the day. The immediate resistance level lies at $2,757.89, and a successful breach of this barrier could push gold toward the next resistance at $2,771.04. If the bullish sentiment continues, traders may look for gains targeting the higher resistance at $2,778.16.
The pivot point is set at $2,764.23, a crucial marker that traders should watch closely. A sustained move above this pivot would reinforce a bullish outlook, potentially establishing new support levels.
The 50-day EMA, currently positioned at $2,737.06, provides further support and signals that the overall trend remains upward. With gold trading above this level, the technical landscape favors a bullish bias.
The Relative Strength Index (RSI) stands at 64, indicating positive momentum but staying below the overbought threshold, suggesting room for further gains without an immediate pullback.
If prices encounter selling pressure, initial support rests at $2,748.71, followed by a more substantial support level at $2,740.15. Should the decline extend, $2,730.18 offers additional support, cushioning any downside risk.
For those entering positions, the outlook remains bullish above $2,745, with suggested profit-taking around $2,765 and a stop-loss set near the 50-day EMA at $2,737.06.
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GOLD Price Analysis – Oct 28, 2024
Daily Price Outlook
Gold prices (XAU/USD) have struggled to stop its downward trend but remined bearish around $2,732. However, the US dollar is gaining strength, driven by rising Treasury yields, which was seen as a key factor putting pressure on gold.
Many investors are shifting their expectations, anticipating only modest rate cuts from the Federal Reserve, which further weighs on the precious metal. Apart from this, the risk-on market sentiment has also limited demand for gold as a safe-haven asset.
On the flip side, losses in gold might be limited due to ongoing tensions in the Middle East and concerns surrounding the upcoming US elections, which are increasing demand for safe-haven assets and providing some support for prices.
Looking forward, traders appear hesitant to make strong moves in gold as they await several key US economic reports this week, including the Q3 GDP, the PCE Price Index, and the Nonfarm Payrolls (NFP) report.
Strengthening US Dollar and Economic Optimism Put Pressure on Gold Prices
On the US front, the broad-based US dollar is edging higher amid growing expectations that the Federal Reserve will opt for smaller rate cuts. Recently, the dollar reached its highest level since July 30, buoyed by market speculation for a more measured approach to easing monetary policy.
According to the CME Group's FedWatch Tool, traders have nearly fully priced in a standard 25 basis points rate cut by the Fed at its upcoming November meeting.
Looking at US economic data, recent indicators have reinforced this bullish outlook. In September, Durable Goods Orders fell by 0.8%, which is better than the anticipated 1% drop, and orders excluding transportation increased by 0.4%.
Meanwhile, the University of Michigan’s Consumer Sentiment Index for October rose to a six-month high of 70.5, surpassing both the preliminary estimate and last month’s figure.
Therefore, the bullish US dollar, driven by rising Treasury yields and positive economic data, makes gold less attractive as a non-yielding asset. Consequently, this upward pressure on the dollar and expectations of smaller Fed rate cuts can depress gold prices.
Geopolitical and Economic Shifts Could Weaken Gold's Safe-Haven Appeal
On the geopolitical front, Iran announced on Saturday that it would refrain from retaliating against Israeli airstrikes on its military targets, provided a ceasefire agreement is reached for the ongoing conflict in Gaza and Lebanon.
This statement suggests that Iran may prioritize diplomacy over military action to stabilize the situation.
Meanwhile, China is taking steps to boost its economy as it enters the fourth quarter. On Monday, Vice Minister of Finance Liao Min stated that the country will enhance its macroeconomic policies to support economic recovery.
This indicates that China is actively seeking ways to stimulate its economy and strengthen growth as it faces various challenges.
Hence, Iran's restraint in retaliation ease geopolitical tensions, reducing safe-haven demand for gold. Meanwhile, China's efforts to stimulate economic growth could strengthen the yuan, further pressuring gold prices as investors shift towards riskier assets and away from precious metals.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is experiencing a mild downturn as it tests the critical support level near $2,724.61. The 50-day Exponential Moving Average (EMA) at $2,732.56 is in close alignment with the current price, acting as a pivotal point that could determine the next directional move.
The Relative Strength Index (RSI) stands at 48, signaling a neutral momentum and leaving room for potential upside if the price can hold above the $2,726 pivot level. A solid rebound from this area could see Gold challenging immediate resistance at $2,741.59, with further targets set at $2,750.07 and $2,758.54.
On the downside, a decisive break below $2,724.61 could expose Gold to lower support levels at $2,717.49 and $2,708.90, reflecting potential selling pressure. Given the global economic uncertainty, Gold's price action remains sensitive to shifts in investor sentiment, which often directs funds toward safe-haven assets.
For traders considering entry, a buy-limit order near $2,726 could yield a favorable risk-to-reward scenario, targeting the $2,741 resistance. This setup anticipates a potential bounce while safeguarding against deeper declines with a stop loss set just below $2,717. Overall, maintaining a watch on key levels around the pivot and EMA will be crucial for gauging further price movements.
Conclusion: Gold’s price trajectory hinges on the $2,726 pivot level, with a potential upside to $2,741 if support holds. A break below this level could trigger further downside, while a buy-limit entry at $2,726 offers an opportunity for gains with limited risk.
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