- Gold prices ended the week higher as the dollar struggled.
- US inflation has cooled, putting pressure on the US dollar.
- In gold, a technical correction may occur amidst profit taking.
The weekly forecast for gold is bullish as the price rose 2.5% last week. The US dollar weakened and US bond yields fell. The lack of significant macroeconomic events next week will give him the opportunity to focus on technical analysis of XAU/USD for potential trading opportunities.
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Last week had its ups and downs.
Gold suffered a technical correction to the upside on Monday due to the lack of impactful data releases. Gold gained momentum on Tuesday, climbing above $1,970. In particular, the US Consumer Price Index (CPI) showed a monthly decline in inflation from 0.4% in September to -0.1% in October, and settled at 3.2% for the year.
Over the same period, core CPI, which excludes volatile energy and food prices, rose 4%. The U.S. dollar came under heavy selling pressure as the yield on the 10-year U.S. Treasury fell below 4.5%, depreciating more than 3%. As a result, XAU/USD rose more than 1%.
U.S. retail sales fell 0.1% in October, exceeding market expectations for a 0.3% decline. However, the number of new jobless claims rose on Thursday, impacting the dollar’s performance. Additionally, the Fed reported that industrial production fell by 0.6% in October. Despite mid-week volatility, gold made a breakthrough, moving towards $1,980.
Gold continued its upward trend on the last trading day of the week when UST yields fell, hitting a new high above $1,990 in a while. Positive sentiment was fueled by comments from Federal Reserve Vice Chairman Philip Jefferson that there would be no immediate end to bank balance sheets. Demand for gold remained strong as Indian buyers overlooked local price increases during Diwali and China’s continued accumulation of gold holdings at a high premium.
Next week’s major gold events
The Fed will release its meeting minutes on Tuesday, but market reaction is expected to be subdued as focus shifts to potential Fed policy changes in 2015.
Wednesday’s U.S. economic data includes October durable goods orders and weekly new jobless claims. Market reaction is likely to follow the usual pattern, with lower-than-expected numbers negatively impacting the dollar and supporting numbers stronger.
U.S. markets will be closed on Thursday for the Thanksgiving holiday and will be closed for half a day on Friday. Market reaction to S&P Global’s November manufacturing and services PMI preliminary survey may be limited due to thin trading conditions.
Considering current market trends, investors should closely monitor technical changes in XAU/USD for potential opportunities.
Gold weekly technical forecast: buyers are waiting for a rebound
of MoneyThe daily chart shows the price slowly rising to an all-time high of $2,075. Prices remain above major SMAs. However, Friday’s closing price suggests a gradual downward correction amid profit-taking.
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Therefore, when the metal falls into the demand zone, it can rally to buy traction. A breakout of this zone could attract sellers and change the outlook to bearish.
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