Gold daily forecast is maintaining a strong bullish trend as the precious metal edges closer to its resistance level of $2,670.56. It started the week on a high note, rising to $2,665.56, fueled by expectations of a possible rate cut by the Federal Reserve due to US inflation data. The Producer Price Index (PPI) for September reflected a 1.8% increase in overall prices and a 2.8% jump in core prices. While this was slightly above expectations, it signals that inflation may be easing.
The possibility of a Federal Reserve rate cut has grown stronger, with the CME Group’s FedWatch Tool suggesting a 90% likelihood that the central bank will lower rates by 25 basis points in November.
Impact of Weakening US Dollar on Gold Prices
The US Dollar has softened as inflation data points to a favorable outlook. However, the 10-year US Treasury yield remains above 4%, showcasing a cautious market stance. A weaker dollar typically benefits gold, making it more affordable for buyers using other currencies. Despite this, the elevated Treasury yields limit gold’s upward potential, providing some market restraint.
Geopolitical Concerns and China’s Economic Struggles Boost Gold’s Safe-Haven Appeal
Ongoing geopolitical tensions in the Middle East have increased the demand for safe-haven assets like gold. Additionally, concerns over China’s economic recovery have added to gold’s appeal. China’s Consumer Price Index (CPI) for September showed no growth, with a mere 0.4% annual rise, which fell short of market expectations. This lackluster performance raises concerns about the strength of China’s recovery and has driven further interest in gold.
As the US market was closed for Columbus Day, gold prices will likely be influenced by fluctuations in the US Dollar and further developments in the geopolitical sphere. Despite ongoing uncertainties, gold remains a preferred choice for investors seeking safety amid global economic instability.
Short-Term Gold Daily Forecast
In the short term, gold is expected to retain its bullish momentum as long as it stays above $2,662. A resistance level of $2,670.56 remains a crucial barrier. If gold breaks this resistance, it could face further challenges at $2,677.72 and $2,685.66. However, should gold drop below the $2,662 mark, selling pressure may build, with key support found at $2,638.10.
Technical Analysis of Gold Prices
Gold is currently trading at $2,665.56, reflecting a 0.31% increase, and is positioned above the pivot point of $2,661.52. Immediate resistance remains at $2,670.56, followed by higher resistance at $2,677.72 and $2,685.66.
On the downside, critical support is located at $2,650.43 and $2,638.10, with the 50-day EMA standing at $2,638.47. Gold is likely to continue its bullish momentum as long as it stays above the $2,662 level. The “three white soldiers” candlestick pattern also suggests an ongoing uptrend. However, a break below $2,662 could initiate stronger selling pressure, with the 50-day EMA playing a crucial role in shaping future price movements.
In conclusion, gold continues to shine as a safe-haven asset amidst global uncertainty and potential shifts in US monetary policy. Investors should monitor the market closely, especially regarding fluctuations in the US Dollar and any further geopolitical tensions.
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