Gold fell below key levels in early morning gold trading session as strong labor market data prompted traders to reconsider bets that the Federal Reserve will cut interest rates earlier in 2024.
Spot prices fell below $2,000 per ounce, marking a sharp reversal from last week’s record high. A strong recovery in the dollar and signs of a strengthening US economy were the main factors driving the yellow metal as risk sentiment improved.
Going forward, the central bank’s most important decision and November US inflation data will be released this week. Both factors affect prices and gold trading. The statement and the outlook for future policies will drive market sentiment.
Friday’s non-farm payrolls reading has already seen the market sharply cut expectations for a rate cut in March 2024, a move that led to big gold losses.
In addition to the Fed, interest rate decisions from the Bank of England, the European Central Bank and the Swiss National Bank are also expected this week, and all three banks are likely to announce higher interest rates for a longer period of time.
Technical Outlook – Gold Trading:
Gold drop from a peak of $2,146.79 and fell more than 2.20%. Yesterday, prices reached their lowest level since November 27, 2023 at $1,994.69.
In the chart above, prices are trading under a falling AB=CD pattern. Gold pulled back from part D and moved to crucial support at $1988.50, a break below will extend the decline to $1968.50 to $1957.50. Alternatively, huge resistance is seen on the upside at $2,040.20, if prices break above it, it could recover to $2,052.50-$2,068.50.
Commodity Samachar
Learn and Trade with Ease
Also Read: World’s largest central bank and China data to set market on track? , Forex News Letter: Dollar Index, Silver and Excitement around Gold?
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