Gold Price Soar to 1-Month High, Dollar Momentum To Carry it Forward – What Lies Ahead?

Gold Price Soar to 1-Month High, Dollar Momentum To Carry it Forward - What Lies Ahead?

Gold price gained nearly one percent yesterday and it reached near to one month high, as the prospect of no more rate hikes by the Federal Reserve spurred continued flows into the yellow metal. However, the minutes of the Fed’s late-October meeting, released on Tuesday, showed the bank sticking to its higher for longer outlook on interest rates, capping some gains.

The FOMC meeting minutes revealed that officials were committed to tightening policy further if progress in controlling inflation falters. The hawkish outlook supported the US Dollar and the currency witnessed modest bounce from its lowest level since August 31.  This could be a concern for the bullion’s gains.

Further, yield on the benchmark 10-year US Government bond close to a two-month low yesterday, continued supporting the bullion’s prices and pushing forward the gold price.  Elsewhere, the ECB is also seen doing with interest rate hikes, and some investors expect the first-rate cut could happen in April next year.

In China, the PBOC left its one and five-year loan prime rates steady at 3.45% and 4.2%, respectively, at its November fixing, in line with expectations.

Technical Outlook – Gold Price

The Gold Price benefited from a weaker dollar, since 20 November 2023 prices enjoyed a meaningful rally, it rebounded from the low 60356 and touched recent high 61366, gained over 1.65%. Today, prices traded at 61350, up 0.20%.

As per the outlook given on 15 November 2023, it has proven to be accurate. After breaching the resistance 60455, Gold price hit the predicted target 60850-61150.00.

 A higher high formation on the chart is still indicating the upside momentum. However, prices trading near to massive resistance 61545, coincided with previous swing high. A break above only could extend bullish momentum and prices may touch new multi month high 61800-61950.00.

Else, one should wait for a temporary dip towards 60800-60650 for further upside move.

Alternatively, on the downside crucial support is seen at 60320 and a break below only prices will retreat towards 59980-59750.00 in near future.

Apart from that, focus will shift on initial claims and durable goods orders, set to release later today. As both data will give an update on the economic performance, trading is likely to remain neutral ahead of the Thanksgiving holiday.

Commodity Samachar
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