- With a gain of $50 an ounce of gold, prices moved at the beginning of this week's trading with strong momentum from the increasing geopolitical tensions in the Middle East.
- Yesterday, the gold price index jumped to the resistance level of $2,676 per ounce before stabilizing around $2,658 per ounce at the beginning of trading on Tuesday.
- According to gold trading company platforms, the gold price is coming from a stable week but has risen by 30% since the beginning of 2024.
Factors Affecting the Gold Market in the Coming Days
Regardless of the gains of the US dollar, the price of gold will be affected by the readiness of financial markets to announce US inflation figures this week with the announcement of the US Consumer Price Index and producer prices. The annual US inflation rate is expected to remain stable at 3.3%. Core inflation, which excludes volatile energy and food categories, is expected to rise to 2.7%. While inflation is significantly lower than its June 2022 peak of 9.1%, policymakers at the Federal Reserve are concerned that inflation is sticky and may remain above the central bank's target rate of 2%.
On the front of expectations for monetary policy, the futures market largely expects a 25-basis point reduction in US interest rates at the final meeting of 2024. However, investors believe that the Federal Reserve may not be as aggressive in 2025, with inflation pressures remaining high.
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US Dollar Performance and Impact on Gold Price Tomorrow
Gold’s gains came as US Treasury yields rose broadly, with the 10-year Treasury yield rising to 4.2%. furthermore, the 2-year yield was at 4.13% while the 30-year yield recovered to 4.39%. The US Dollar Index (DXY), which measures the performance of the US currency against a basket of other major currencies, also rose to 106.13, bringing its gains since the beginning of 2024 to nearly 4.75%. As is known, a strong US dollar is bad for commodities priced in dollars because it makes them more expensive for foreign investors to buy.
US Stocks Witness Selling
According to stock trading company platforms, Monday's session was bearish for US stock indices, with selling led by a decline in Nvidia shares amid a Chinese antitrust investigation, and investors' caution ahead of an important US inflation report. According to trades, both the S&P 500 and Nasdaq 100 indices declined by 0.6%, giving up record highs, while the Dow Jones index fell by 240 points. In general, US stock markets are cautiously awaiting US inflation data this week, which could affect expectations for US interest rate cuts by the Federal Reserve.
Trading Tips:
The spot gold prices will remain on an upward trajectory. Concurrently, we still prefer to buy gold from every downward level. Meanwhile, bank purchases of gold have returned and demand for the metal has increased as a safe haven despite the strength of the US dollar.
Gold Price Technical Analysis and Expectations Today:
According to the performance on the daily timeframe chart above, gold prices are still on an upward trajectory. With the recent gains, expectations have increased for the possibility of the gold price returning to the psychological resistance of $2,700 per ounce in the near future, especially if the bulls push prices towards the resistance levels of $2,665 and $2,683 again. The Relative Strength Index (RSI) and MACD are in an upward direction, waiting for more. Conversely, and on the same timeframe, a return to the vicinity of support levels of $2,628, $2,605, and $2585 per ounce will be important for the bears to regain control of the gold direction. Decisively, we still prefer buying gold from every dip, but without taking risks and activating take-profit and stop-loss orders to ensure the safety of the trading account from any sudden price reversals.
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