Gold prices were poised for a weekly fall after the Federal Reserve’s verdict on its monetary policy-easing cycle noted a slowdown in cuts, while market focus shifted to the U.S. Personal Consumption Expenditure data due later in the day.
The Fed cut rates by 25 basis points and the cautious note struck by its economic projections and expected slowdown of rate cuts pushed gold on Wednesday to its lowest point since Nov. 18.
Data showed on Thursday that the U.S. economy grew faster than expected in the third quarter, while jobless claims also slipped more than anticipated, reinforcing expectations that the central bank will take a cautious approach to policy easing in the coming year.
Bank of England policymakers voted 6-3 to keep interest rates on hold on Thursday. A Reuters poll showed that top consumer China is widely expected to leave its benchmark lending rates unchanged later on Friday.
Adding to this, The dollar was set to cap the week on a strong note on Friday as it was perched near a two-year high bolstered by a hawkish U.S. rate outlook, while the yen struggled to stay afloat as it again weakened to a new low, weighted on sentiment.
Currencies took a breather after huge moves in the previous session sparked by a broad rally in the greenback. That drove its peers to milestone lows with the South Korean won sinking to a 15-year trough, the Canadian dollar tumbling to its weakest in more than four years and the Australian and New Zealand dollars hitting two-year lows.
Central banks from Brazil to Indonesia also scrambled to defend their struggling currencies on Thursday.
The focus now will be on key U.S. core PCE data — the Fed’s preferred inflation measure, later today.
Technical Outlook of Gold Prices
Gold prices extend fall for seventh consecutive day, and settled at 75,651 compared to the previous day’s close of 76,653.
After breaching the crucial support 76980, Gold prices retreated towards 75459 yesterday. Hit both predicted levels, as per the Monday outlook.
On the above chart, prices have broken down the key support levels which are indicating pressure likely to continue. Adding to the bearish outlook, the RSI (14) and its 9-day SMA have triggered a negative crossover, signaling a potential for continued downside momentum in the near term.
Immediate Support: ₹75,438. A break below this level could open the path to test the next support at ₹75,050–₹74,750 levels.
Resistance Zone: Any rise toward ₹76880–₹76950 is likely to face selling pressure this week.
Upside Potential: A decisive break above the key resistance at ₹77350 could shift the trend, paving the way for further gains toward ₹77900–₹78,800.
Traders should closely monitor these levels for directional cues in the coming sessions.
Until then, Happy Trading!
Commodity Samachar Securities
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