- At the beginning of this week's trading, the price of gold jumped to the resistance level of $ 2,666 per ounce, as geopolitical tensions in the Middle East region increased.
- With the US dollar gaining strength, gold prices faced profit-taking on Tuesday, dipping towards the $2,638 per ounce support level.
- However, the upward trend remains intact as markets continue to evaluate the Federal Reserve's interest rate expectations following recent inflation data.
According to the economic calendar, data showed that US producer prices were stable in September, coinciding with a rise in jobless claims that challenged the idea of the resilience of the US Labor market in the face of restrictive interest rates. However, core US inflation slowed less than expected, while core inflation rose more than expected.
Currently, the chances of a 25-basis point cut in the federal funds rate in November are 87%. Investors are now looking ahead to additional economic data, including retail sales reports and speeches from several Federal Reserve officials for further guidance. Meanwhile, elevated geopolitical risks in the Middle East continue to boost gold’s safe-haven appeal.
Regarding factors affecting the gold market, the US dollar is hovering near a two-month high. The US Dollar Index (DXY) traded at 103 on Monday, hovering near its two-month highs amid strong expectations that the Federal Reserve will not provide further significant cuts in interest rates in its remaining meetings this year.
These views have evolved with the release of the latest monthly jobs report and consumer inflation data with stronger-than-expected results, although a rise in weekly jobless claims and slowing producer inflation provided a counterargument. Financial markets are currently pricing in an 87% chance of a 25-basis point rate cut in November, while discounting any chance of another half-point cut. Investors are now looking ahead to retail sales and new jobless claims data this week, as well as comments from Federal Reserve Governor Christopher Waller later today.
According to forex trading, the US dollar strengthened broadly, gaining significantly on the yuan after disappointing stimulus announcements from China over the weekend.
According to stock trading platforms, US stock futures stabilized after the Dow Jones and S&P 500 indexes recorded new record highs. US stock futures were flat on Tuesday after another winning session on Wall Street, as investors look ahead to a slew of corporate earnings reports. In regular trading on Monday, the Dow Jones and S&P 500 rose 0.47% and 0.77%, respectively, with both indexes hitting new record highs. The Nasdaq Composite also jumped 0.87% to its highest level in three months.
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According to the trades, nine of the 11 sectors in the S&P 500 index ended higher, led by technology, utilities, and real estate stocks, while the energy sector was the only loser amid weaker crude oil prices. Among individual names, shares of the popular artificial intelligence company Nvidia rose 2.4% to close at an all-time high. Coinbase shares also rose 11.3% on the back of rising bitcoin prices, while shares of Longboard Pharmaceuticals and Trump Media rose 51.7% and 18.5%, respectively. Overall, investors are now looking forward to quarterly reports from Goldman Sachs, UnitedHealth, and Johnson & Johnson, among others, on Tuesday. Key Federal Reserve officials are also scheduled to speak at various events throughout the day.
Gold Price Analysis and Forecast Today:
According to today's gold analysts, recent selling has not prevented the bulls' strong control over the gold price trend. As mentioned before, regardless of the US dollar price, the gold market will continue to benefit significantly from increasing global geopolitical tensions and the abandonment of tightening policies by global central banks. Currently, and based on the daily chart, the most important resistance levels will be $2,675 and $2,700 per ounce, and from now until these levels, technical indicators will move towards overbought levels.
To initially break the current uptrend, bears must move gold prices towards support levels of $2,610 and $2555 per ounce.
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