Driven by the weakening of the US dollar, spot gold closed up more than $20 last week and reached the $2000/ounce mark. FXStreet analyst Eren Sengezer wrote last Friday (November 24th) that the outlook for gold remains bullish. The gold price for the next week may be influenced by important economic data from the United States and speeches from Federal Reserve officials.
The spot gold price rose significantly by $21.83, or 1.1%, last week to close at $2002.48 per ounce. Last week, gold prices hit a peak of $2007.57 per ounce.
Philip Steinble, Chief Market Strategist at Blue Line Futures, said that the weakening of the US dollar index in the past week with weak economic data should prompt a shift in Federal Reserve policy, bringing a favorable wind to gold prices in 2024.
After falling 1.9% last week, the US dollar index fell another 0.4% last week and is expected to achieve its worst monthly performance in a year.
Jane Foley, senior foreign exchange strategist at Rabobank, said that economic data has provided ample evidence of a recession in the United States.
Powell's speech comes this week with heavyweight data from the United States
The US Bureau of Economic Analysis will release the revised annualized growth rate of gross domestic product (GDP) for the third quarter on Wednesday. Sengezer stated that if the growth rate drops significantly from the initial 4.9%, it may put pressure on the US dollar and help gold rise.
On Thursday morning trading in Asia, market participants will closely monitor China's National Bureau of Statistics PMI data for manufacturing and non manufacturing industries. Sengezer stated that as the world's largest consumer of gold, there are signs of improvement in China's commercial activities, which may support gold.
Later on Thursday, the United States will release the Personal Consumption Expenditure (PCE) Price Index. Sengezer believes that unless the core PCE price index increases by more than 0.5% month on month in October, the market's expectation that the Federal Reserve will start lowering policy rates in the second half of 2024 is unlikely to change.
Finally, the November ISM Manufacturing Purchasing Managers Index in the United States will be released on Friday. If the data unexpectedly rebounds above 50, it may boost the US dollar before next weekend.
Investors will continue to closely monitor the comments of Federal Reserve officials before the silence period that begins on December 2nd. Federal Reserve Chairman Jerome Powell will deliver a speech next Friday.
The "Federal Reserve Watch" tool of the Chicago Mercantile Exchange Group (CME Group) shows that the market expects a probability of only 22% for the Federal Reserve to maintain policy rates at 5.25% -5.5% unchanged until June next year.
Sengezer pointed out that if Federal Reserve policymakers suppress market expectations and try to persuade participants that they will not consider lowering interest rates for a longer period of time, the US dollar may find a foothold, making it difficult for gold to gain a bullish outlook.
Analysis of the Prospects of Gold Technology
The Relative Strength Index (RSI) remained stable around 60, indicating that despite maintaining a bullish trend, gold is still striving to accumulate momentum.
The gold price closed above the critical level of $2000 per ounce last Friday. Gold bulls need to pay attention to whether gold prices can maintain this level.
Sengezer pointed out that once the gold price confirms support at $2000 per ounce, technology buyers may take action. In this case, 2010 USD/oz and 2040 USD/oz may be set as the next bullish targets.
On the downside, Sengezer added that the 20 day simple moving average (SMA) formed a dynamic support level around $1980 per ounce.
Sengezer reminds that if the daily closing price of gold falls below $1980 per ounce, it may open the door to falling towards $1950 per ounce (the latest upward trend's 23.6% Fibonacci retracement level) and $1940-1935 per ounce (the 200 day moving average and 100 day moving average).
