- Gold price attempts to bounce from two-month lows of $2,611 as Fedspeak awaits on Tuesday.
- The US Dollar holds Trump trades-led upside despite sluggish Treasury yields and a better mood.
- Gold price recovery must find a foothold above $2,645 as the daily RSI stays bearish.
Gold price is seeing a dead cat bounce early Tuesday after being hammered down to two-month lows of $2,611 on Wednesday. Attention now turns to speeches from several US Federal Reserve (Fed) policymakers due later in the day for fresh hints on the central bank’s interest rate cut outlook.
Gold buyers try their luck yet again
In the meantime, Gold traders are likely to take cues from the prevalent market sentiment and the US Dollar price action, as they continue to digest the latest measures under consideration by China to support its housing sector.
Citing people familiar with the matter, Bloomberg News reported that Chinese authorities are outlining a plan enabling major cities, such as Shanghai and Beijing, to reduce the deed tax for buyers to as low as 1%, down from the current rate of up to 3%.
Following the market’s disappointment over China’s 10 trillion yuan ($1.4 trillion) debt package, any additional supportive measures are unlikely to have any positive market impact, as traders remain wary of potential trade tariffs that could be imposed by US President-elect Donald Trump when he returns to office in January next year.
Also, traders refrain from placing fresh bets on the Gold price heading toward Wednesday’s high-impact US Consumer Price Index (CPI) inflation data, which could significantly impact the Fed’s path forward on rates and the US Dollar (USD).
That said, any upside attempt in Gold price could likely be limited as markets continue to favor the USD amid the ‘Trump trades’ and fading expectations of future rate cuts by the Fed.
A solid win for Trump in the US presidential race and a likely Republican majority in Congress have boosted expectations for a more straightforward path to implement his policies. Trump’s policies on foreign trade and tax cuts are seen as inflationary, which could dissuade the Fed from continuing its easing cycle. This, in turn, could support the USD at the expense of Gold price.
Markets are currently pricing in a 67% chance that the Fed will lower rates by 25 basis points (bps) in December, the CME Group’s FedWatch Tool showed, down from about 83% seen at the start of the month. Therefore, Fedspeak is eagerly awaited to seek more clues on the Fed’s rate cut outlook.
Gold price technical analysis: Daily chart
Having taken down all the major Fibonacci Retracement (Fibo) levels recently, Gold price Is consolidating the downside before the next push lower.
In doing so, Gold price has retraced the entire advance from the October 10 low of $2,604 to the all-time high of $2,790.
The 14-day Relative Strength Index (RSI) remains below the 50 level, keeping the downside risks well in place.
Any recovery in Gold price will need to find acceptance above the strong resistance near $2,645, where the 50-day Simple Moving Average (SMA) and the 78.6% Fibo level of the same ascent close in.
The next topside barriers are 61.8% Fibo and 50% Fibo supports-turned-resistances at $2,673 and $2,695, respectively.
If the downtrend regains traction, sellers will attack the October 10 low of $2,604, below which a test of the 100-day SMA at $2,538 will be inevitable in the coming days.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin price breaks above the $100K milestone
Bitcoin's price surpassed the $100K mark on Thursday after its recent pullback last week.The momentum indicator, the Relative Strength Index, indicates a continuation of the uptrend, while the technical outlook suggests a rally toward $113K.
EUR/USD holds above 1.0500 despite weak EU data
EUR/USD stays in positive territory above 1.0500 in the European session on Thursday even after the data from the Euro area showed that Retail Sales declined by 0.5% on a monthly basis in October. Market focus shifts to mid-tier US data releases.
GBP/USD rise further above 1.2700 amid weaker US Dollar
GBP/USD trades with a positive bias for the third straight day and rises further above the 1.2700 mark in the European session on Thursday. The pair takes advantage of the sustained US Dollar weakness and mild risk appetite heading into the US data releases later in the day.
Gold price struggles for a firm near-term direction as traders keenly await US NFP report
Gold price extends its consolidative price move amid mixed fundamental cues. Geopolitical risks and trade war fears offer support to the safe-haven XAU/USD. Less dovish Fed expectations and rebounding US bond yields act as a headwind.
GBP/USD rise further above 1.2700 amid weaker US Dollar
GBP/USD trades with a positive bias for the third straight day and rises further above the 1.2700 mark in the European session on Thursday. The pair takes advantage of the sustained US Dollar weakness and mild risk appetite heading into the US data releases later in the day.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.