The dynamics of international gold trading have shown intriguing patterns recently, particularly within the context of December 10th's market activityGold, also referred to as London gold, exhibited a strong bullish movement, concluding the trading session with significant gains, particularly breaking through the resistance of the 60-day moving averageThis surge indicates a notable increase in bullish momentum, reinforcing an optimistic outlook for the foreseeable futureAnalysts are cautiously confident that gold prices will likely maintain a position above the support of the 100-day moving average, highlighting the ongoing strength of the market.
As the trading day unfolded, gold prices started at an opening mark of $2660.95 per ounceInitially, a dip was observed with a recorded low of $2657.77 during the dayHowever, the market quickly reboundedDespite grappling with resistance at $2674 around midday and seeing prices retrace, the overall trend remained positive as prices did not fall below the opening figure
This rebound ultimately led to the gold price peaking at $2695.16 around 1:30 AM in the subsequent trading sessionAfter slight profit-taking, prices closed at $2693.68, reflecting a daily range fluctuation of $37.39, with a net gain of $30.73, equivalent to a rise of 1.15%.
Market analysts suggest that the dollar's fluctuating strength, as indicated by the rising US dollar index, coupled with the ten-year US Treasury yield, did not place any substantial strain on gold pricesIn fact, the strengthening dollar and rising treasury yields appear more as technical signals prompting buy-side activity rather than a fundamental threat to goldMoreover, expectations surrounding interest rate cuts from the Bank of Canada and the European Central Bank bolstered market sentiment, further sustaining bullish gold dynamics.
Geopolitical tensions simmering globally, alongside anticipations of a third rate cut by the Federal Reserve the following week, have similarly provided buoyancy to gold prices
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Under these conditions, unless domestic economic indicators or monetary policy decisions in the United States fortify the dollar significantly, gold appears insulated from substantial downward pressureThe current narrative thus seems heavily dominated by engagements in geopolitical matters and Fed rate cut expectations.
As we turn our gaze towards December 11, market sentiment for gold remains robust, although initial trading showed some restraintInvestors are keenly awaiting the release of the US Consumer Price Index (CPI) data anticipated later that evening, which is likely to influence trading volume and volatility.
The dollar index's daily chart signaled a rebound after touching the support line of an ascending trend, prompting a retreat of bearish forcesThe weekly chart indicates that the dollar has stayed above its ten-week moving average, and Bollinger Bands are directing an upward trajectory without descending further, which could restrain bullish tendencies in gold
However, analysts opine that unless the Federal Reserve chooses not to cut rates, the pressure from a stronger dollar is not likely to stifle gold prices significantly.
Additionally, the ten-year Treasury yield has rebounded back above its 200-day moving average, shrinking bearish signals on attached indicators and showing a buildup of bullish powerStill, there's an ongoing caution that should this rally fall short of overcoming retracement resistance lines, it could carry a risk of a downward shift, which might provide support for goldThe weekly chart's positioning within a downward channel also supports the notion that until pressures of this channel are breached, significant hurdles for gold remain limited.
In summary, the recent uptick in the dollar index and treasury yields appears to be of little consequence to gold's trajectoryDuring this phase of global monetary easing, as long as the Fed remains committed to its rate-cutting path, both dollar strength and gold could coexist in bullish territory
An optimistic forecast even suggests a potential challenge for gold prices to reach the $3000 mark next year amid persistent economic conditions.
Looking closely at the key economic indicators to monitor today, the focus will be on the year-over-year unadjusted CPI for November and the month-over-month adjusted CPI, as well as the adjusted core CPI metricsThe consensus anticipates a surge in inflation in the former data, while holding steady in the latter, which could dampen rate cut expectations for the upcoming week, potentially exerting downward pressure on gold.
However, the substantial upward movement in gold prices over the year suggests a natural resilience to adverse newsEven in the face of negative market sentiment, gold is likely to hover above the supportive threshold of the 100-day moving average, maintaining a bullish technical outlookThe overwhelming bullish momentum indicates that, barring significant adverse economic data, gold will continue to find avenues for upward excursions.
On the contrary, should inflation shows signs of cooling down, the prospects for this month's rate cuts would likely rise, directly boosting gold's appeal and propelling it once more above the $2700 threshold in search of historical highs.
Examining the macroeconomic backdrop, the influence of central banks has been profound this year
With robust purchasing activity from central banks globally and the continuance of monetary easing, the overall demand for gold has strengthened considerablyMoreover, the unprecedented 50 basis point interest rate cut by the Federal Reserve in September initiated a broader trend of rate reductions, fuelling repeated hits on gold price records.
As geopolitical uncertainties loom and their necessity for safe-haven assets like gold prevails, the reversal of reduced rate cut expectations has stretched gold’s bullish narrative, particularly in light of gradually diminishing uncertainty in US policiesThis persistent juxtaposition strengthens gold's standing amidst increased risks, augmented by renewed Fed rate cut anticipations, thus securing its position within a bullish framework without immediate prospects for retreat.
Overall, recent sentiments regarding the Fed's potential interest rate adjustments have revitalized gold's attractiveness, evidenced by a surge in positive market reactions following recent employment reports in the US
As such, gold is likely to oscillate within high-range volatility or further mount in strength, with bearish pivot points still seeming distantly positioned.
From a technical perspective, the monthly charts indicate that gold has managed to rebound from previous lows established in November, forming a distinctive long lower shadow without convincingly breaching the support at the five-month moving averageThis signals the depletion of prior downward pressures, suggesting a continued alignment with the bullish trend as the markets look ahead.
With the December open initially dipping yet now recovering and reasserting itself stronger above the five-month moving average, the outlook remains consistent—provided that the gold price does not breach below this moving average; the markets are expected to maintain a high-level oscillation or anticipate a rally to refresh historical peaks.
On the weekly horizon, gold trends indicate continued stabilization above key mid-range supports; though indicators signal ongoing bearishness, prominence remains on the higher lows being established, suggesting a rally beyond the $2800 resistance if pressures from the mid-trend support remain unchallenged.
Daily observations illustrate the consistent strengthening of gold, with recent breaks above the 60-day moving average suggesting the arisen bullish strength, converting former resistance to support