On Monday (November 20th) in the US market, due to concerns about the global economy increasing market pressure, precious metal bulls have lost momentum and need new and positive fundamental developments to boost morale.
As of press release, spot gold fell 0.38% to $1973.14 per ounce.
On the eve of the Thanksgiving holiday in the United States later this week, there were relatively few US economic data releases on Monday.
Due to expectations that US interest rates have peaked, the US dollar index fell to 103.46, its lowest level since early September, as investors seem to have consolidated their bets that the Federal Reserve may start cutting interest rates next year.
There are media reports that Israel, the United States, and Hamas have reached a temporary agreement to release dozens of hostages in Gaza in exchange for a five day suspension of fighting, but it has not been confirmed.
The minutes of the last Federal Reserve meeting will provide some ideas for policymakers to maintain interest rate stability for the second time.
ActivTrades senior analyst Ricardo Evangelista said, "The minutes of the dove faction meeting may trigger some downside risks for the US dollar
Daoming Securities stated that the imminent economic recession, the slow response of the Federal Reserve, and the rapid interest rate cutting cycle will jointly drive gold prices to reach a historic high in the first half of 2024. The imminent economic recession, the slow response of the Federal Reserve, and the rapid interest rate cutting cycle will jointly drive gold prices to a historic high in the first half of 2024.
Ming Securities expects a significant deterioration in the growth outlook starting from the fourth quarter of 2023 and continuing until the first half of next year.
We believe the market is already satisfied with the idea of the Federal Reserve providing insurance based interest rate cuts, but with the certainty of the economic recession outlook, this must also be further strengthened. The Fed's rate cuts will far exceed the market's current expectations, "said Ghali, an analyst at Dao Ming Securities
He also stated that if the Federal Reserve's decision is based on real interest rates rather than nominal interest rates, then "long-term high" actually amounts to an additional significant interest rate hike, even if economic growth deteriorates.
Ghali predicts that Daoming expects gold prices to start hitting a series of new historical highs at this time. He also stated that even before the upcoming breakthrough, the current strength of gold indicates that central bank purchases have led to structural changes in the market.
The interesting thing about the gold market is that the interest rate hikes we see are often quite detrimental to gold prices, but if you narrow down, today's gold prices are still hovering around historical highs. The deterioration of this relationship actually indicates that the demand from the central bank is very high, which distorts this relationship because investors tend to focus on interest rates and interest rates can penetrate capital flowing into gold
technical analysis
Technically, bullish gold futures have a slight overall short-term technical advantage. The next upward price target for bulls is a strong resistance level above $2000.00. The next short-term downward price target for bears is to push them below the solid technical support level of $1900.00.
The first resistance level was the overnight high of $1987.80, followed by last week's high of $1996.40.
The first support level is the overnight low of $1972.50, followed by $1959.00.
