Gold price declined for the second day in a row as rising US Treasury bond yields applied downward pressure. The yellow metal, trading at $2,657, recorded a 0.80% decrease. Traders are keenly awaiting the Federal Reserve’s (Fed) monetary policy meeting scheduled for December 17-18, where an interest rate decision is expected.
Weekly Performance and Key Economic Data
Despite recent losses, gold price remains up by almost 1% for the week, buoyed by various US economic data releases. Inflation reports showed mixed signals, while the Initial Jobless Claims data fueled market expectations of a December rate cut by the Fed. Current predictions from the Chicago Board of Trade (CBOT) indicate a 93% probability of a 25 basis points (bps) rate cut.
Investors are also focused on Fed Chair Jerome Powell’s upcoming press conference, seeking clarity on the policy direction for 2025. Additional data released on Friday highlighted marginal increases in US Import Prices, while Export Prices experienced a slight decline in November.
Factors Driving Gold price Recent Movement
The decline in gold prices was further exacerbated by rising US Treasury bond yields. The 10-year bond yield climbed to 4.375%, negatively impacting the non-yielding asset.
Daily Market Movers:
- US Dollar Index: Remains stable at 107.05.
- November Import Prices: Increased by 0.1% MoM, exceeding forecasts of a -0.2% drop.
- Export Prices: Fell from 1% to 0% MoM, outperforming expectations of a -0.2% decrease.
- Geopolitical Impact: US Secretary of State Antony Blinken expressed optimism about a potential Gaza ceasefire, influencing market sentiment.
Analysts note low conviction levels as the year ends, resulting in gold price reversals often met with position-squaring. Moreover, China’s central bank may increase gold demand during periods of local currency weakness, aiming to boost confidence.
Technical Analysis and Key Levels to Watch
Gold prices corrected from a two-month peak of $2,726, settling within the $2,600-$2,700 range. This range aligns with the 50 and 100-day Simple Moving Averages (SMAs) at $2,670 and $2,597, respectively.
- Support Levels:
- $2,600 (100-day SMA)
- $2,536 (November 14 low)
- Resistance Levels:
- $2,700
- $2,726 (December 12 peak)
- $2,790 (record high)
A weekly close below the 50-day SMA could drive gold prices lower, while reclaiming $2,700 might pave the way for another bullish run.
What to Expect Next Week
The upcoming US economic calendar features significant events that could influence gold prices, including:
- S&P Global Flash PMIs
- Retail Sales and Industrial Production Data
- FOMC Policy Decision
- Core PCE Price Index
Traders will closely monitor these reports, alongside Powell’s comments, for additional market direction.
Internal and External Links for Further Insights
For daily gold updates and market analysis, visit Daily Gold Signal. You can explore the latest Daily Gold Updates to stay informed about key trends.
