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Gold pushes higher despite Middle East ceasefire, buoyant US Dollar

  • Gold price remains unchanged at $2,625, held back by a mix of geopolitical developments and stronger US Dollar.
  • Trump threatens tariffs on Canada, Mexico, and China, boosting the Greenback and raising fears of a global trade war.
  • Ceasefire optimism between Israel and Hezbollah dampens Gold’s appeal as a safe-haven asset.

Gold prices remain stuck at around $2,625 for the second straight day, even though US President Donald Trump threatened to impose tariffs on three of its major trading partners in a post on his social media platform. Usually, the golden metal should rise on geopolitical uncertainties, but a de-escalation in the Middle East conflict poured cold water on the precious metal.

The XAU/USD trades at $2,625, virtually unchanged. Meanwhile, the latest Federal Open Market Committee (FOMC) minutes were released. They hinted that the Federal Reserve could pause reducing rates and hold them at around restrictive levels if inflation remains elevated.

Trump’s intentions to impose tariffs on Canada, Mexico, and China boosted the Greenback, ramping up fears of a global trade war.

Bullion’s collapse on Monday was exacerbated by Israel and Hezbollah ceasefire optimism and pressured by the nomination of Scott Bessent as US Treasury Secretary for Trump’s upcoming administration. This improved risk appetite, denting demand for Gold’s safe-haven status.

Nevertheless, Gold’s losses were capped if not by the escalation of the Ukraine-Russia conflict. This prevented XAU/USD from falling beneath $2,600 a troy ounce, even though the Greenback recovered some ground.

Data-wise, the US economic docket featured the release of the Conference Board (CB) Consumer Confidence in November, which exceeded estimates and October’s number,

Ahead this week, the US economic docket will feature Durable Goods Orders, Initial Jobless Claims, and the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index.

Daily digest market movers: Gold prices fluctuate at around $2,620

  • Gold prices recovered as US real yields rose eight basis points to 2.014%.
  • The US Dollar Index climbs over 0.16%, up at 107.00.
  • The CME FedWatch Tool suggests that investors see a 59% chance of a 25-basis-point rate cut at the US central bank’s December meeting, up from 52% a day ago.
  • The Conference Board’s Consumer Confidence for November expanded by 111.7, up from 109.6, exceeding estimates of 111.3
  • Data from the Chicago Board of Trade, via the December fed funds rate futures contract, shows investors estimate 22 bps of Fed easing by the end of 2024.

Technical outlook: Gold price dwindles, consolidates at around the 50,100-day SMAs

Gold's price is neutral to downward biased after sellers pushed Bullion below the $2,700 mark. Additionally, XAU/USD is carving a series of successively lower highs and lower lows. If bears push prices below $2,600, it will open the door to testing the 100-day SMA of $2,565, immediately followed by the November 14 swing low of $2,536.

Conversely, if buyers recover the 50-day SMA at $2,665, this could pave the way to challenge $2,700. Once surpassed, the next stop would be $2,750, ahead of the all-time high at $2,790.

Oscillators like the Relative Strength Index (RSI) have shifted bearishly, indicating sellers are in charge.

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Read more.

Last release: Tue Nov 26, 2024 19:00

Frequency: Irregular

Actual: -

Consensus: -

Previous: -

Source: Federal Reserve

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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