Safe-Haven Fluctuations Impacting Gold
Gold prices continue to hover around the 2,604.56 level as we head through the back end of the week. Prices fell sharply on Monday but have since stabilised with the market seeing no further declines this week as the market awaits fresh drivers. News of an Israel-Hezbollah ceasefire in Lebanon is fuelling hopes of a similar agreement to be reached with Hamas in Gaza, diluting safe-haven demand for now. Still, the situation remains highly volatile with increasing uncertainty around the Russia/Ukraine war, gold remains vulnerable to upside spikes on increased safe-haven demand.
USD & The Fed
Away from geo-political uncertainty and safe-haven flows, USD moves and Fed expectations are also driving gold. An uptick in Fed easing expectations on the back of softer data this week, is helping keep gold prices supported. New home sales and durable goods were seen falling while advanced GDP and core PCE both printed in line with forecasts. If expectations for a further Fed cut in December continue to pull USD lower near-term, gold prices have room to recover retest highs in the coming month.
Looking ahead this week, with US traders out for Thanksgiving, flows are expected to be lighter. However, If USD continues to soften ahead of the weekend gold prices should find better demand into next week.
Technical Views
Gold
For now, the market is holding above the 2,604 level support and with momentum studies turning higher, focus is on a fresh test of 2,684.76 next with a return to YTD highs in sight above there. To the downside, 2,530.59 remains the key support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.