This week, the gold market has successfully recovered from the $2000 level and is expected to close in the rising region for the second consecutive week. However, analysts say that the momentum of gold prices remains limited, and as the Federal Reserve maintains its tendency to tighten monetary policy, it is unlikely that gold prices will break through the current resistance level.
Analysts point out that with Israel and Hamas agreeing to a limited ceasefire, which weakens the safe haven appeal of precious metals, US monetary policy is expected to become the most important factor driving the recent trend of gold prices.
"Our economists expect the first rate cut to be implemented in the middle of next year, so only then will the price of gold continue to climb above $2000," said Barbara Lambrecht, a commodity analyst at Commerzbank in Germany, in a report on Friday (November 24th)
However, although gold prices may fall below $2000 per ounce, many analysts do not anticipate significant downside risks as seasonal factors begin to take effect.
Nicky Shiels, Metal Strategy Director at MKS PAMP, stated in a recent report that over the past five years, gold has risen an average of 2.7% from Thanksgiving to December 31.
Ole Hansen, head of commodity strategy at Shengbao Bank, stated that the biggest risk facing gold will be a rise in bond yields leading to a strengthening of the US dollar.
He said, "Gold seems to be well supported, and only a significant rise in the US dollar can change this situation." "Unless a break/close above 2010 triggers concerns of missing opportunities, it is somewhat questionable whether it is ready to decisively push up."
As US monetary policy regains attention, the gold market will be sensitive to US GDP and inflation data. Although the US economy is expected to achieve extraordinary growth in the third quarter, people are increasingly concerned about a slowdown in economic activity in the fourth quarter. Meanwhile, the slowdown in growth is expected to continue to slow down inflation.
The market will also pay attention to a series of central bank spokespersons on Tuesday, while Federal Reserve Chairman Powell will attend a fireside talk titled "Navigating the Path of Economic Liquidity" at Spearman College in Atlanta.
In recent comments, Powell bluntly stated that as inflation remains uncontrolled, interest rates will remain within a restrictive range.
However, energy prices and next week's OPEC+meeting may become potential wildcards for inflation.
Cartel will announce a new oil production reduction plan, but if these measures fail to move expectations, oil prices will continue the current downward trend.
Daniel Ghali, Senior Commodity Strategist at TD Securities, said that contrary to intuition, the decline in oil prices may provide some short-term support for gold. He explained that lower energy prices will provide the Federal Reserve with some space to ease the current tightening trend.
However, Ghali stated that he does not believe that gold prices will break through new highs in the short term. He pointed out that the demand from Asia and emerging markets continues to support precious metals, but he added that gold is still in trouble as Western investors continue to avoid it.
"We expect Western investors to continue to ignore the gold market until the United States enters a recession in the first half of next year, which will force the Federal Reserve to significantly lower interest rates," he said.
Gold price breaks through $2000, but resistance remains
From the technical perspective of gold, analysts suggest that investors and traders need to pay attention to the initial resistance level of the 2010 US dollar.
Fiona Cincotta, Senior Market Analyst at City Index, said, "If the buyer's closing price is higher than $2009, the price may continue to be bullish until April's high of $2050, before reaching a historic high of $2082."
On the downside, analysts emphasized the initial support level between $1945 and $1930 per ounce.
"If we see gold prices falling below $1940, then this new upward trend is over and we will have to wait for another buying opportunity," said Phillip Streible, Chief Market Strategist at Blue Line Futures
However, Streible stated that he is still bullish on gold as the market appears to be preparing for a Christmas rebound.
Next week's economic data:
Monday: New home sales in the United States
Tuesday: US Consumer Confidence Index
Wednesday: Initial GDP for the third quarter of the United States
Thursday: OPEC meeting, US CPE index, personal income and expenditure, weekly initial unemployment claims, sales of unsold properties
Friday: ISM Manufacturing PMI, Powell Stove Side Talks
