GOLD Price Analysis – Dec 17, 2024
Daily Price Outlook
Gold price (XAU/USD) was unable to break its consolidating range and remained stuck between slight gains and minor losses during the European session on Tuesday.
It is currently trading near 2,638 level close to the one-week low reached the previous day, as traders seemed hesitant and opted to wait for clearer signals on the Federal Reserve's (Fed) rate-cut plans before making new bets.
However, the reason can be linked to the ongoing expectations for a less dovish Fed, which continued to support higher US Treasury bond yields. This gave the US Dollar some strength and creating downward pressure on Gold.
On the flip side, ongoing geopolitical risks, particularly from the Russia-Ukraine war and Middle East tensions, still provided support to Gold as a safe-haven asset. Traders are now eyeing the US Retail Sales data later today for further market direction.
US Dollar Strengthens Amid Robust Economic Data and Fed Rate Speculation
On the US front, the broad-based US Dollar has been gaining strength due to recent data showing strong growth in the US economy. The S&P Global flash US Services PMI for December rose to its highest level in 38 months, jumping from 56.1 to 58.5.
Meanwhile, the Composite PMI increased to 56.6, a 33-month high. This solid economic performance, despite a dip in the Manufacturing PMI, has raised expectations that the Federal Reserve may not be as dovish as previously anticipated.
Traders are waiting for more clarity on the Fed's rate-cut plans, leading to a quieter, range-bound market ahead of the important FOMC policy decision on Wednesday.
Meanwhile, the US Dollar's rise has put pressure on non-yielding assets like Gold. Higher US Treasury bond yields are supporting the Dollar, while geopolitical risks, such as tensions with North Korea, Russia, and Yemen, are pushing investors toward safe-haven assets like Gold.
Despite this, markets are focusing on the upcoming US Retail Sales data and the Fed's meeting later this week for potential market-moving updates.
Investors are also keeping a close eye on the impact of US President-elect Donald Trump's policies, which could affect inflation and force the Fed to adjust its rate-cut cycle.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) remains under pressure, trading near $2,648.85, down 0.14% as bearish momentum dominates the session. On the 4-hour chart, Gold has slipped below the key pivot point at $2,654.36, indicating weak sentiment.
Immediate resistance stands at $2,672.93, where the 50-EMA sits slightly higher at $2,678.78, capping upside movement. A sustained push above this level could expose Gold to the next resistance levels at $2,690.55 and $2,707.78.
On the downside, immediate support holds firm at $2,634.28, with sellers eyeing the next critical levels at $2,617.80 and $2,601.58.
The Relative Strength Index (RSI) sits at 36, suggesting Gold is approaching oversold territory but still maintaining a bearish bias.
Technical indicators confirm downward pressure, as the price trades below both the pivot point and the 50-EMA, signaling strong seller control. If bears maintain momentum, a break below $2,634.28 could trigger a sharper decline.
However, any reversal above the $2,654.36 pivot would shift sentiment back in favor of the bulls, though immediate upside remains limited.
Conclusion: A Sell Stop entry at $2,647 is favored, targeting $2,634 as a take-profit level, with a stop-loss at $2,659 to mitigate risk.
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- AUD/USD Price Analysis – Dec 17, 2024
USD/CAD Price Analysis – Dec 17, 2024
Daily Price Outlook
During the European trading session, the USD/CAD currency pair continued its upward trend, staying strong around the 1.4280 level and even reaching an intra-day high of 1.4294.
The reason for this rise can be attributed to the US Dollar bouncing back from its losses in the previous sessions, partly due to higher Treasury yields.
At the time, the US Dollar Index (DXY), which tracks the USD against six major currencies, was holding steady near the 107.00 mark. US Treasury bond yields were also higher, with the 2-year at 4.26% and the 10-year at 4.41%.
On the other hand, the Canadian Dollar (CAD) struggled to maintain its ground due to dovish comments from Bank of Canada (BoC) Governor Tiff Macklem.
Speaking on Monday, Macklem mentioned that the BoC is preparing for an uncertain future with increased vulnerability to economic shocks.
He also noted that the central bank would assess the need for further rate cuts cautiously, taking a more gradual approach to monetary policy, depending on how the economy evolves. This outlook has left the CAD under pressure, contributing to USD/CAD's bullish momentum.
Challenges for the Canadian Dollar Amid Political Uncertainty and Economic Concerns
As we mentioned, the Canadian Dollar (CAD) has been facing challenges recently. In addition to the Bank of Canada’s (BoC) dovish stance, there are political issues weighing on the currency.
Prime Minister Justin Trudeau is facing pressure to resign after Finance Minister Chrystia Freeland announced on Monday that she is stepping down from the Cabinet. This political uncertainty has added to the CAD's struggles, making it harder for the currency to strengthen.
On top of this, the BoC Governor, Tiff Macklem, has made comments that suggest the central bank is preparing for a more uncertain future. Traders will be closely watching Canada’s November Consumer Price Index (CPI) inflation data, which is due later today.
Moreover, the release of November’s US retail sales data in the North American session could also impact the currency market. With these developments, the CAD faces a challenging environment in the near term.
US Dollar Strengthens Amid Higher Treasury Yields and Strong Economic Data, Focus on Fed's Rate Cut Decision
On the US front, the broad-based US dollar is gaining support as it recovers from losses in the previous two sessions.
This strength is linked to higher Treasury yields, with the US Dollar Index (DXY) trading around 107.00. The yields on US Treasury bonds for both 2-year and 10-year bonds are at 4.26% and 4.41%, respectively.
Recent economic data showing strong growth in the US is also supporting the USD. The S&P Global flash US Services PMI for December jumped to 58.5, its highest in 38 months, and the Composite PMI rose to 56.6, the highest in 33 months. These figures signal solid economic performance, even though the Manufacturing PMI showed a slight decline.
Traders are now focused on the upcoming decision from the US Federal Reserve (Fed), particularly the possibility of an interest rate cut. The market is nearly fully pricing in a quarter-point rate cut at the Fed’s December meeting.
Moving ahead, traders focus is on the Fed's projections for 2025, as this will give more clarity on their future plans. Therefore, the strong US economic data, combined with expectations of a potential rate cut, has raised hopes that the Fed might not be as dovish as previously expected, which is adding support to the USD.
USD/CAD - Trade Ideas
USD/CAD is trading at $1.42708, up 0.19%, maintaining its bullish momentum as buyers push prices above key levels.
On the 4-hour chart, the pair trades above the pivot point at $1.42549, signaling continued upside potential. Immediate resistance stands at $1.42923, with a breakout opening the path toward the next key levels at $1.43147 and $1.43365.
The 50 EMA, currently at $1.42065, serves as strong support, reinforcing bullish sentiment. A retest of the pivot point near $1.42549 could attract fresh buyers, as the uptrend remains intact.
On the downside, immediate support rests at $1.42243, with further levels at $1.41986 and $1.41689 offering strong downside protection.
The Relative Strength Index (RSI) stands at 68, hovering near overbought territory but still signaling strong buying pressure. This suggests that USD/CAD could see further upside before any significant pullback.
Technical indicators, including price action above the 50 EMA and the pivot point, confirm the bullish outlook. Traders are closely watching for a decisive move above $1.42923, which could extend the rally to higher resistance levels.
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- GOLD Price Analysis – Dec 17, 2024
AUD/USD Price Analysis – Dec 17, 2024
Daily Price Outlook
During the European trading session, the AUD/USD pair extended its downward trend, struggling to hold ground and slipping to an intra-day low of 0.6337, remaining under pressure near the 0.6340 level.
The pair's decline is largely driven by a bullish US Dollar (USD), which is benefiting from firm expectations that the Federal Reserve (Fed) will signal a more cautious approach to easing monetary policy during its upcoming meeting on Wednesday.
This comes after the Fed is expected to lower interest rates by 25 basis points (bps) to a range of 4.25%-4.50%.
On the other hand, the Australian Dollar remains weak, weighed down by a subdued market sentiment and rising speculation that the Reserve Bank of Australia (RBA) may start cutting its Official Cash Rate (OCR) as early as February.
These factors, combined with the overall risk-averse mood, are keeping the AUD/USD pair under persistent selling pressure. Traders are now closely watching key economic developments and central bank signals for the next directional move.
Australian Dollar Weakens Amid Economic Concerns and Trade Tensions
On the AUD front, the Australian Dollar (AUD) is struggling across the board due to a weak market sentiment and growing concerns that the Reserve Bank of Australia (RBA) might start cutting its key interest rate (Official Cash Rate, or OCR) as early as February.
This has put pressure on the currency, as traders expect further easing of monetary policy. Additionally, a 2% decline in Australia’s Westpac Consumer Confidence for December, following a 5.3% increase in November, has raised concerns about the country's economic outlook.
Furthermore, the AUD is also being weighed down by external factors, particularly concerns about China's economic growth. With US President-elect Donald Trump expected to impose new tariffs on China, the Australian Dollar is feeling the pressure.
This is especially concerning for Australia, as China is its largest trading partner. The combination of internal economic worries and external trade tensions is keeping the AUD under strain and contributing to its ongoing weakness.
AUD/USD – Technical Analysis
The Australian Dollar (AUD/USD) continues to face bearish pressure, trading at $0.63458, down 0.38% for the session. On the 4-hour chart, the pair has slipped below the pivot point at $0.63619, reinforcing near-term downward momentum.
Immediate resistance lies at $0.63823, closely aligned with the 50 EMA at $0.63719, which adds a dynamic ceiling for further recovery. Any sustained move above this level could target the next resistance at $0.64025 and extend gains toward $0.64287.
On the downside, immediate support is observed at $0.63367. A break below this level opens the door for sellers to test further support at $0.63156 and potentially extend declines toward $0.62957.
The Relative Strength Index (RSI) stands at 36, signaling a bearish trend with oversold conditions approaching.
Technical indicators suggest sellers remain firmly in control, with the price trading below both the pivot point and the 50 EMA, highlighting a sustained bearish outlook.
The pair’s inability to reclaim $0.63619 confirms strong selling pressure, with a potential for further downside if the current sentiment persists.
Conclusion: Traders may consider a Sell Stop entry at $0.63509, targeting a take-profit level of $0.63171, with a stop-loss placed at $0.63800 to manage risk.
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- GOLD Price Analysis – Dec 17, 2024
EUR/USD Price Analysis – Dec 16, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to maintain its gains, slipping back below the key 1.0500 level. The pair fell to an intraday low of 1.0484, reflecting ongoing pressure.
The main factor behind this decline was the dovish stance of the European Central Bank (ECB). ECB President Christine Lagarde, along with several other policymakers, expressed support for further rate cuts and a gradual move towards a neutral rate around 2%.
Meanwhile, the US Dollar staged a rebound, pushing the US Dollar Index (DXY) close to the important 107.00 level.
This renewed strength in the Greenback, combined with uncertainty surrounding the Federal Reserve’s upcoming interest rate decision on Wednesday, kept the USD volatile, contributing to the EUR/USD’s downward pressure.
ECB Signals Further Rate Cuts and Mixed Economic Data Weigh on EUR/USD
On the EUR front, the European Central Bank (ECB) is signaling further policy easing. ECB President Christine Lagarde mentioned that they may cut interest rates more if the data shows that inflation is slowing down.
She also noted that inflation in services has dropped sharply. Additionally, ECB Vice President Luis de Guindos agreed that the bank would continue with its current approach for the time being, suggesting more rate cuts are likely.
Recently, the ECB reduced its Deposit Facility rate by 25 basis points to 3%, part of a total of 100 basis points in rate cuts this year.
With inflation in the Eurozone under control and concerns about economic risks, markets expect the ECB to cut rates by another 100 basis points by June 2025.
On the economic front, the latest data from the Eurozone showed some positive signs. The December Purchasing Managers' Index (PMI) was better than expected, rising to 49.5 from 48.3, suggesting that business activity in the region is slowing down less than before.
The Services PMI improved, expanding to 51.4, which was better than analysts predicted. However, the Manufacturing PMI remained in contraction at 45.2.
Meanwhile, the German and French PMIs also showed improvement, mainly due to better performance in the services sector, although they remained below the 50.0 threshold, signaling ongoing contraction.
In politics, French President Macron appointed Francois Bayrou as the new prime minister, replacing Michel Barnier, who lost a no-confidence vote.
Therefore, the ECB's signals for further rate cuts and the mixed economic data, including a slower pace of contraction in business activity, may put downward pressure on the EUR. This could lead to continued weakness in the EUR/USD pair, especially against a strong USD.
US Dollar Strength and Fed's Rate Cut Expectations Pressure EUR/USD
On the US front, the US Dollar (USD) has regained some strength, pushing the US Dollar Index (DXY) closer to the key resistance level of 107.00. This rebound has caused the EUR/USD pair to give up its earlier gains.
The USD is expected to stay volatile as investors await the Federal Reserve’s (Fed) interest rate decision on Wednesday. The Fed is widely expected to lower its key borrowing rates by 25 basis points, bringing them to 4.25%-4.50%.
Investors will closely examine the Fed’s Summary of Economic Projections, also known as the “dot plot,” which outlines where policymakers expect interest rates to go in the medium and long term.
However, the recent Bloomberg survey revealed that most economists expect the Fed’s outlook for 2025 to be less dovish, meaning they predict fewer interest rate cuts.
Economists anticipate the Fed will reduce rates three times next year, assuming progress in controlling inflation slows. However, there are growing concerns about inflation risks, especially with the potential impact of President-elect Donald Trump's policies, such as new tariffs and tax cuts.
Today, investors will also pay attention to the S&P Global PMI report for December, which will provide further insights into the US economy’s performance.
Therefore, the US Dollar's strength and expectations of a 25 basis point rate cut by the Fed could pressure the EUR/USD pair, especially if the Fed's outlook signals fewer rate cuts in 2025. The pair may face further downward pressure as a result.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05188, up 0.19%, as the pair extends its recovery above the pivot point of $1.05032. The immediate resistance level lies at $1.05480, a critical threshold for short-term buyers.
A break above this level could see the euro challenging higher resistance at $1.05914 and potentially $1.06294, driven by renewed bullish momentum and improving sentiment.
On the downside, immediate support is at $1.04525, followed by stronger safety nets at $1.04204 and $1.03858. The pair remains supported near the 50 EMA at $1.05031, highlighting stability around the pivot zone.
Traders should watch this level closely, as a sustained position above it suggests further upside potential, while a breach below could shift focus to the support zones.
The Relative Strength Index (RSI) stands at 54, reflecting neutral momentum and signaling room for further gains if buyers take control.
A cautious bullish tone persists as long as the EUR/USD pair holds above the pivot point. The buy limit entry near $1.05037, targeting $1.05491, aligns well with the current technical structure, with a stop loss placed at $1.04699 for risk management.
In conclusion, while market conditions remain delicate, the EUR/USD appears poised for upward movement above $1.05032, with near-term targets pointing to $1.05480 and beyond.
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- GOLD Price Analysis – Dec 16, 2024
GOLD Price Analysis – Dec 16, 2024
Daily Price Outlook
Gold (XAU/USD) maintained its upward momentum, holding steady around the 2,653 mark and reaching an intra-day high of 2,655.
The primary driver behind this rise was the weaker US dollar, which lost its gains as the Federal Reserve is expected to announce a 25 basis point rate cut in its final monetary policy meeting of 2024. This led to a lower US dollar, supporting gold prices.
Furthermore, China’s disappointing retail sales data and its focus on fiscal stimulus heightened global economic uncertainty, boosting gold’s appeal as a safe-haven asset.
In the meantime, the ongoing trade tensions with the US and geopolitical uncertainties, including concerns over US President-elect Donald Trump’s policies, further supported the price of gold. Traders are now eyeing the release of the flash global PMIs for potential short-term opportunities.
Gold Price Boosted by Global Economic Uncertainty and Weaker US Dollar
On the China front, November retail sales rose by 3.0% year-over-year, falling short of the expected 4.6% and the previous 4.8%.
However, industrial production grew by 5.4%, surpassing the forecast of 5.3%. With the economy facing challenges, China’s leadership, led by President Xi Jinping, has pledged to raise the fiscal deficit target next year and shift focus towards boosting consumption.
The uncertainty surrounding China’s fiscal support has contributed to increased global economic uncertainty, which in turn has boosted the appeal of gold as a safe-haven asset.
Additionally, growing trade tensions between China and the US, including retaliation against US sanctions, has driven further demand for gold as a hedge against geopolitical risks.
On the other hand, the US dollar has weakened ahead of the Federal Reserve’s (Fed) interest rate decision.
The Fed is widely expected to cut rates by 25 basis points in its final meeting of 2024, and markets have nearly fully priced in this reduction. Thus, the weaker dollar typically supports higher gold prices.
On the data front, the Producer Price Index (PPI) rose by 0.4% month-over-month in November, signaling potential inflation pressures.
Despite this, the market still expects the Federal Reserve to lower interest rates, which supports the upward movement of gold prices. Gold tends to benefit from rate cuts because lower interest rates make gold more attractive compared to other investments.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,654.78, marking a modest gain of 0.23% in today’s session as buyers maintain control above the pivot point of $2,643.92. This upward movement reflects continued demand for the safe-haven asset amid cautious market sentiment.
Immediate resistance stands at $2,669.67, with further targets at $2,692.74 and $2,707.78. A decisive break above $2,669.67 could accelerate bullish momentum, driving gold prices toward the next critical levels.
On the downside, support is seen at $2,627.76, followed by stronger cushions at $2,613.84 and $2,598.13. Traders should monitor these levels closely, as a breach below $2,643.92 could trigger selling pressure, leading to a test of lower supports.
Technically, the 50 EMA at $2,685.75 acts as a significant barrier for further gains, suggesting near-term overhead resistance.
Meanwhile, the Relative Strength Index (RSI) at 30 indicates oversold conditions, which may support a short-term recovery if buyers step in around key levels.
The overall trend remains cautiously bullish as long as gold sustains above the $2,643.92 pivot. A buy entry above this level with a target at $2,668 and a stop loss at $2,633 aligns with the prevailing market structure. However, any break below immediate support could invalidate the bullish bias.
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- GBP/USD Price Analysis – Dec 16, 2024
GBP/USD Price Analysis – Dec 16, 2024
Daily Price Outlook
During the European trading session, the GBP/USD pair climbed to around 1.2647, briefly reaching an intraday high of 1.2671.
This upward movement was driven by the release of the UK’s flash S&P Global/CIPS Purchasing Managers’ Index (PMI) data.
The report revealed that overall business activity in the UK expanded modestly, with the PMI rising to 50.5. Meanwhile, the US dollar weakened, turning bearish ahead of key monetary policy meetings this week.
Moving ahead, Federal Reserve is set to meet on Wednesday, followed by the Bank of England on Thursday, adding to market anticipation and influencing the currency pair's performance.
GBP/USD Volatility Set to Increase Ahead of Fed and BoE Meetings Amid Mixed UK PMI Data
On the BoE front, the release of the UK’s flash S&P Global/CIPS PMI data offered mixed signals. Overall business activity expanded at a steady pace, with the PMI rising to 50.5.
However, the manufacturing sector showed a faster-than-expected contraction, with its PMI dropping to 47.3 from 48.0 in November, against forecasts of 48.1.
On the other hand, the services sector grew more robustly, with its PMI climbing to 51.4, beating expectations of 51.0 and the previous month’s 50.8.
Despite this moderate growth, businesses remain cautious due to fragile consumer confidence, tighter budgets, and cutbacks in non-essential spending.
The report also revealed a decline in staffing for the third straight month, partly due to upcoming increases in National Insurance contributions.
Meanwhile, the Pound Sterling gained strength against the US Dollar, which remained subdued with the US Dollar Index (DXY) around 107.00.
Investors are bracing for volatility in the GBP/USD pair this week as both the Federal Reserve (Fed) and the Bank of England (BoE) are set for their final policy meetings of the year.
The Fed is expected to reduce interest rates by 25 basis points to 4.25%-4.50%, while the BoE is likely to keep its rates unchanged at 4.75%.
However, with these rate decisions largely priced in, market attention is shifting toward the outlook for 2025, where traders anticipate three rate cuts from both central banks.
In addition to the central bank meetings, UK economic data will also influence the Pound this week. Employment figures for the three months ending in October and the Consumer Price Index (CPI) data for November will be released on Tuesday and Wednesday.
Any significant deviation from expected numbers could influence market expectations for the BoE’s future actions and its policy stance for 2025.
(GBP/USD) – Technical Analysis
The GBP/USD pair is trading at $1.26392, up 0.24%, as buyers extend gains above the pivot point of $1.26160. The immediate resistance sits at $1.26725, where a break higher could open the door to further upside, targeting resistance levels at $1.27194 and $1.27860.
Market sentiment remains cautiously optimistic, with the pound benefiting from renewed risk appetite and technical buying momentum.
On the downside, immediate support is seen at $1.25679, followed by further levels at $1.25239 and $1.24866, which could attract dip-buyers if the pair retraces.
Despite the current uptick, the 50-day EMA at $1.27096 looms overhead as a key hurdle for bullish continuation, and any failure to breach this resistance could trigger a pullback.
The Relative Strength Index (RSI) stands at 40, signaling mild bearish pressure but also leaving room for a potential recovery.
The technical setup suggests cautious buying above the pivot point at $1.26160, with a target of $1.26742 and a stop loss at $1.25862 to manage downside risks.
In conclusion, the GBP/USD remains in a consolidative phase, but the short-term bias tilts bullish above $1.26160.
A sustained push above $1.26725 would reinforce upward momentum, while failure to hold the pivot could expose the pair to further selling pressure.
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S&P500 (SPX) Price Analysis – Dec 13, 2024
Daily Price Outlook
The S&P 500 has been facing some bearish pressure, dropping around 6,051 level, despite a positive economic outlook in the U.S. However, the major factor contributing to the decline is the escalating geopolitical tensions in the Middle East.
This uncertainty has raised concerns about global stability, leading to safe-haven demand, particularly for precious metals like gold. In the meantime, the recent Israeli strike, which resulted in numerous casualties in Gaza, has only intensified these concerns, spurring more cautious sentiment in the equity markets.
At the same time, the U.S. dollar has been benefiting from its role as a global safe-haven asset. The US dollar's strength is providing some support to U.S. equities, limiting further declines in the S&P 500.
Whereas, the Producer Price Index (PPI) was slightly higher than expected, the overall economic picture, including the PCE report, still points to inflation cooling in key areas. This suggests the Federal Reserve may not be as aggressive with rate hikes, which could also help mitigate the bearish sentiment in the stock market.
Geopolitical Risks and Their Impact on the S&P 500 Index
On the geopolitical front, the ongoing geopolitical tensions, particularly in the Middle East, have also played a major role in the recent struggles of the S&P 500.
The ongoing conflict in Gaza, with Israeli airstrikes causing significant casualties, has escalated concerns about the broader implications of instability in the region.
Investors often seek safe-haven assets like gold or U.S. Treasuries during periods of geopolitical turmoil, and such events can lead to increased volatility in equity markets.
For the S&P 500, the rise in geopolitical risks often results in risk-off behavior from investors, leading to a sell-off in stocks.
The uncertainty surrounding the situation in the Middle East adds to the already fragile sentiment caused by inflationary concerns and rising interest rates.
In times of such instability, equity markets like the S&P 500 tend to underperform as investors shift towards safer, more stable assets. This heightened uncertainty further exacerbates the pressure on the index, contributing to its overall bearish trend in the current market environment.
S&P 500 – Technical Analysis
The SPX500 trades at 6,051.25, down 0.54% on the 4-hour chart, reflecting cautious market sentiment. Prices hover near the pivot point at 6,053.16, which acts as a critical level for maintaining stability.
Immediate resistance is seen at 6,093.09, followed by 6,127.09 and 6,165.62. On the downside, immediate support lies at 6,028.71, with additional levels at 5,984.87 and 5,950.90, offering safety nets for bearish pressure.
The 50 EMA at 6,048.99 aligns closely with current levels, suggesting the index is testing short-term equilibrium.
The Relative Strength Index (RSI) at 45 highlights neutral momentum, tilting slightly bearish, which could limit significant upside unless buying interest revives.
A Buy Limit entry at 6,028 targets 6,092, with a Stop Loss at 5,990 to manage downside risks. A break above 6,093.09 would signal renewed bullish momentum, paving the way for higher targets, while failure to hold the pivot point could prompt a decline toward 5,984.87.
Traders should monitor global risk sentiment and economic data releases, as they are likely to influence near-term trends.
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- GOLD Price Analysis – Dec 13, 2024
GOLD Price Analysis – Dec 13, 2024
Daily Price Outlook
Despite the strong US dollar, gold prices (XAU/USD) have continued to rise, reaching around the 2,692 level. This rally is driven by growing geopolitical tensions, such as the ongoing Russia-Ukraine conflict and escalating issues in the Middle East, which are prompting investors to seek the safety of gold.
Besides this, the concerns over US President-elect Donald Trump's potential tariff plans are further boosting gold's appeal as a reliable investment during uncertain times.
Moreover, the Federal Reserve is expected to cut rates for the third consecutive time at its December meeting, providing additional support for gold. However, the potential for further gains may be limited, as the Fed is likely to be cautious with more cuts, given that inflation remains above the 2% target.
Meanwhile, rising US Treasury yields are helping to keep the dollar strong, which could cap gold’s upward movement. As a result, traders are likely to adopt a wait-and-see approach ahead of next week's crucial FOMC meeting.
Impact of US Inflation Data and Fed Rate Cut Expectations on Gold Prices
On the US front, the broad-based US dollar extended its upward rally and remained bullish as a result of the hotter-than-expected US Producer Price Index (PPI) report released on Thursday.
The US PPI increased by 0.4% month-over-month (MoM) in November, marking the largest gain since June. This came after an upward revision of the October PPI, which had risen by 0.3%. The November reading was higher than the expected 0.2% increase, which helped boost the US dollar.
Looking ahead, the US Federal Reserve's interest rate decision will be the main focus next week. Traders are anticipating a 25 basis point rate cut on December 18, according to the CME FedWatch Tool.
In addition, the US Consumer Price Index (CPI) rose to 2.7% year-over-year (YoY) in November, up from 2.6% in October.
In the meantime, the headline CPI showed a 0.3% MoM increase, which was in line with market expectations.
The core CPI, excluding food and energy prices, climbed 3.3% YoY and increased 0.3% MoM, also in line with forecasts. These inflation figures are likely to influence the Fed's next move on interest rates.
Therefore, the stronger US dollar, driven by higher-than-expected inflation data, may put pressure on gold prices, as a stronger dollar makes gold more expensive for foreign buyers. Additionally, expectations of a Fed rate cut could limit gold’s upward momentum.
Impact of China's Economic Outlook and Middle East Tensions on Gold Prices
On the other hand, China's positive economic outlook, with President Xi Jinping expressing confidence in meeting this year's targets, could support global growth, indirectly benefiting gold. China's Trade Balance (CNY) rose to CNY 692.8 billion in November, up from CNY 679.1 billion in October.
Exports grew by 1.5% year-over-year, while imports increased by 1.2% YoY, signaling a recovery in trade. Despite the slower pace compared to previous months, these positive figures show resilience in China's economy, which could help stabilize market sentiment.
Meanwhile, escalating tensions in the Middle East, including an Israeli airstrike that killed at least 30 Palestinians in Gaza, are driving safe-haven demand.
As geopolitical instability increases, investors often turn to gold as a secure asset, leading to higher demand for the precious metal.
This combination of China's economic strength and the rising global uncertainties could push gold prices higher as investors seek safety amidst market volatility.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) trades at $2,682.67, edging up 0.07% on the 4-hour chart. Prices remain supported by the pivot point at $2,679.33, with immediate resistance at $2,701.96. Further upside could target $2,719.88 and $2,732.71 if bullish momentum strengthens.
On the downside, immediate support is at $2,661.04, followed by $2,647.09 and $2,627.43, levels traders should monitor closely for potential breakdowns.
The 50 EMA at $2,686.62 indicates a neutral-to-bearish short-term trend, with gold trading slightly below this key average. Meanwhile, the Relative Strength Index (RSI) at 45 reflects balanced momentum but leans toward bearish sentiment, suggesting limited upside unless buyers regain control.
Gold’s current setup suggests cautious optimism, with a Buy Limit entry near $2,682 targeting $2,700, while a Stop Loss at $2,672 safeguards against downside risks.
A sustained move above $2,701.96 could confirm a broader bullish breakout, while failure to hold the pivot at $2,679.33 may lead to retests of lower support levels.
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- EUR/USD Price Analysis – Dec 13, 2024
EUR/USD Price Analysis – Dec 13, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its bullish momentum, staying well-supported around the 1.0492 level and reaching an intra-day high of 1.0496. The upward rally can be attributed to the bearish US dollar, which reversed its earlier gains.
Despite strong expectations that the Federal Reserve (Fed) will adopt a slightly hawkish stance after cutting its key interest rates by 25 basis points (bps) to 4.25%-4.50% in Wednesday's policy meeting, the US dollar continued to lose ground.
Meanwhile, comments from European Central Bank (ECB) officials after the blackout period, signaling a dovish outlook on interest rates, failed to drag down the EUR/USD pair.
US Dollar Weakens Despite Hawkish Fed Expectations, Supporting EUR/USD
On the US front, the broad-based US dollar failed to extend its bullish trend and edged lower on the day as it faced selling pressure above the 107.00 level.
Despite strong expectations that the Federal Reserve (Fed) will maintain a slightly hawkish stance after cutting its key interest rates by 25 basis points (bps) to 4.25%-4.50% in the recent policy meeting, the Greenback continued to lose ground.
According to the CME FedWatch tool, traders have priced in a 25-bps rate cut for Wednesday but expect rates to remain unchanged at 4.25%-4.50% in the January policy meeting.
Analysts from Macquarie pointed out that the slowdown in US disinflation, a lower-than-expected unemployment rate, and strong US financial markets are contributing to the Fed's more hawkish outlook.
Adding to the hawkish sentiment, a faster-than-expected rise in the US Producer Price Index (PPI) data for November reinforced expectations of a more aggressive Fed stance.
The PPI report showed that both the annual headline and core PPI (excluding food and energy) increased by 3% and 3.4%, respectively.
Therefore, the US dollar's weakness and expectations of a more hawkish Fed stance have supported the EUR/USD pair, allowing it to remain bullish. The Greenback's decline, despite strong economic data, has helped the Euro maintain its strength against the dollar.
EUR/USD Resilient Despite Dovish ECB Outlook and Economic Concerns
On the EUR front, the shared currency continued to rise toward 1.0500, despite dovish remarks from European Central Bank (ECB) officials after the blackout period.
ECB policymakers, including Bank of France Governor François Villeroy de Galhau, Latvian central bank Governor Mārtiņš Kazāks, and Bank of Estonia Governor Madis Müller, have supported further interest rate cuts, which is generally negative for the Euro.
Furthermore, ECB President Christine Lagarde's comments on Thursday signaled that more rate cuts could be on the way.
The ECB recently reduced its Deposit Facility rate by 25 basis points to 3%, citing a weak Eurozone economic outlook.
Lagarde highlighted the slowdown in exports and weak business investment, suggesting the need for more policy easing.
She pointed out that manufacturing in the Eurozone is still contracting, and growth in services is slowing, while businesses are holding back on investments due to weak demand and an uncertain future.
Some ECB officials even supported a larger rate cut of 50 basis points, signaling concern over economic growth.
The ECB's new economic projections forecast the Eurozone economy to grow only 0.7% in 2024 and 1.1% in 2025, both lower than previously expected. Despite these concerns, the Euro remained resilient against the US dollar.
Despite dovish ECB comments and concerns over Eurozone growth, the EUR/USD pair remained resilient, supported by a weaker US dollar.
The Euro's strength continued as traders priced in the possibility of further rate cuts, but with limited bearish impact.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04554, down 0.11%, reflecting a bearish tone on the 4-hour chart. Prices hover below the pivot point at $1.04794, signaling sustained selling pressure.
Immediate resistance is at $1.05218, followed by $1.05622 and $1.05973. On the downside, support levels are positioned at $1.04270, with further barriers at $1.03987 and $1.03667, providing targets for bearish continuation.
The 50 EMA at $1.05172 confirms short-term downward momentum, with prices consistently trading below this level.
The RSI at 36 indicates bearish sentiment, nearing oversold territory, which may limit the scope for further immediate declines.
A Sell Limit entry at $1.04791 targets $1.04385, with a Stop Loss at $1.05104 to manage risk. A breach of $1.04270 would open the path to $1.03987, reinforcing the bearish trend.
Conversely, a recovery above $1.04794 could shift the tone, with resistance at $1.05218 acting as a key test for buyers.
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USD/JPY Price Analysis – Dec 12, 2024
Daily Price Outlook
During the European trading session, the USD/JPY currency pair struggled to gain any significant momentum, staying sluggish around the 152.44 mark and dipping to an intraday low of 151.95.
This decline comes despite an overall positive sentiment in equity markets and reports suggesting that the Bank of Japan (BoJ) is likely to keep rates steady in its upcoming meeting.
The downward trend is linked to a modest weakness in the US dollar, which lost its earlier traction even after strong US economic data.
Although, the latest US inflation report wasn’t enough to convince markets that the Federal Reserve will avoid cutting interest rates at its upcoming December meeting.
Traders are now almost certain of a 25-basis-point rate cut on December 18, with the CME FedWatch Tool showing a 99% probability.
Market participants are shifting their attention to the US November Producer Price Index (PPI), expected later on Thursday, for fresh insights.
BoJ Policy Uncertainty and US Dollar Strength Weigh on USD/JPY
On the BoJ front, investors remain doubtful about the Bank of Japan’s willingness to tighten its monetary policy further, which is weighing on the Japanese Yen (JPY).
Reports from Reuters suggest that the BoJ is likely to keep interest rates steady at its upcoming policy meeting, though it remains open to a hike depending on economic data and market conditions.
Mixed signals from BoJ officials show no rush to tighten policy, keeping traders cautious about placing big bets on the Yen.
Japan's economy is growing moderately, with rising wages and inflation staying above the BoJ’s 2% target, suggesting conditions may support future hikes.
However, with the Federal Reserve’s decision on a likely rate cut just hours before the BoJ meeting, traders are hesitant to take strong positions.
On the other side, the US dollar is finding some support from higher US Treasury yields, boosted by expectations that the Fed will take a cautious approach to further rate cuts.
The recent US Consumer Price Index (CPI) data showed inflation picking up slightly, with the core CPI rising 3.3% year-over-year in November.
However, progress toward the Fed’s 2% inflation target seems to have stalled, raising uncertainty about future rate decisions.
The US Producer Price Index (PPI) and Weekly Initial Jobless Claims, due later on Thursday, are expected to provide fresh market direction.
These factors, combined with a positive tone in equity markets, are keeping the USD/JPY pair steady despite the JPY's recent weakness.
USD/JPY – Technical Analysis
The USD/JPY pair is trading at 152.523, up 0.04%, reflecting modest upward momentum on the 4-hour chart. The pair is finding support near the pivot point at 151.960, a critical level that traders are monitoring for potential direction.
Immediate resistance is located at 152.749, followed by key levels at 153.605 and 154.558, suggesting room for bullish continuation if the pair can maintain momentum.
On the downside, immediate support lies at 150.994, with deeper levels at 149.836 and 148.883 providing a safety net in case of a pullback.
The 50-day Exponential Moving Average (EMA) at 151.279 underpins short-term bullish sentiment, reinforcing the ongoing upward trend.
The Relative Strength Index (RSI) at 59 indicates neutral-to-bullish momentum, suggesting the pair has room to rise before entering overbought territory.
Traders may consider a buy limit entry at 152.125, targeting 153.600 with a stop loss at 151.500 to manage downside risk.
The technical setup suggests a cautiously bullish outlook for USD/JPY, supported by a broader risk-on sentiment in the markets.
A decisive move above the 152.749 resistance could pave the way for further gains, while holding above the pivot will be crucial to maintaining positive momentum.
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