Gold price trends maintained stability above $2,600, with the market showing cautious optimism. On Thursday, trading liquidity remained low as US markets were closed for Thanksgiving. The ongoing geopolitical developments and expectations of dovish Federal Reserve policies supported demand for the precious metal, keeping its price near $2,630.
Geopolitical Concerns Propel Gold Prices
The recent ceasefire agreement between Israel and Lebanon helped ease market tensions temporarily. However, the escalating conflict in Eastern Europe continues to bolster demand for safe-haven assets like gold. Gold price trends remained resilient despite the ceasefire, reflecting market caution over geopolitical risks.
US President-elect Donald Trump’s tariff threats on China, Canada, and Mexico added uncertainty to the global economy. While these remarks initially weighed on gold prices, his softened rhetoric toward Canada and Mexico helped stabilize the market.
Federal Reserve’s Dovish Stance and Market Impact
The Federal Reserve policy is anticipated to cut interest rates by 25 basis points at its December meeting. According to the CME FedWatch Tool, the likelihood of such a move has risen to 70%, up from 55% earlier in the week.
Lower US Treasury bond yields are keeping the US dollar subdued, indirectly supporting gold prices. With the disinflation process showing signs of stalling, markets are now pricing in minimal Fed easing for 2024.
Technical Outlook for Gold Price Trends
Gold prices are presently stabilizing within the range of the 50-day and 100-day Simple Moving Averages (SMAs), positioned at $2,668 and $2,572, respectively. For gold to gain momentum, buyers must surpass the $2,700 resistance level. Surpassing this level could open the path to testing $2,750 and reaching the record high of $2,790.
Conversely, a drop below $2,600 might open doors for further downside, with immediate support near the 100-day SMA at $2,572. The Relative Strength Index (RSI) indicates bearish sentiment, suggesting sellers may hold the upper hand for now.
Daily Market Highlights
- US Q3 GDP growth came in at 2.8%, falling short of expectations.
- Core PCE Price Index for October increased to 2.8% YoY, signaling potential inflationary pressure.
- Market participants are focusing on upcoming US data, including ISM Manufacturing PMI and remarks by Fed Governor Christopher Waller.
Conclusion
Gold’s steady performance above $2,600 reflects a complex interplay of geopolitical tensions and monetary policy expectations. As market participants monitor global developments, gold’s safe-haven appeal remains strong.
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