Gold rise or stop?!
Today, on December 17th, 2023, we will analyse the technical and fundamental aspects of the global gold ounce for you.
If you open the chart of the global gold ounce and go to the daily timeframe, you will see that in the past week, it has been able to play the role of a strong support for gold by opening at around $1975, which is where the 50-day moving average has been for a long time. On Tuesday, the market went up slightly and then fell again to around $1977 due to bearish pressure.
Gold was able to climb up not only above the $2000 level but also up to around the important $2050 level during Wednesday and thursday due to weak economic reports and dovish decisions by Federal Reserve officials.
Last week's events of gold in the forex market:
Then came Tuesday, the day when the market was waiting for an important report on the US Consumer Price Index (CPI). As you know, the CPI is one of the most significant drivers affecting the market and financial assets such as gold and the dollar. The Federal Reserve officials always consider it in their decisions.
The US Bureau of Labor Statistics reported that the US inflation rate, which is determined by changes in consumer prices, decreased by 3.1% in November. It is worth noting that this figure was announced following October's 3.2% figure, which was exactly in line with analysts' predictions.
The monthly and net monthly inflation rates were also announced at 0.1% and 0.3%, respectively.
Then Wednesday came, the same day that the market was waiting for the important CPI, when the forecasts had announced the figure of 0.2, but the same previous figure was announced as 0.
In addition, the monthly producer price index, which was -0.4, was declared zero, just as predicted.
Federal Reserve Chairman Jerome Powell announced that he and his colleagues have successfully achieved their goal of reaching a 2% inflation rate and will do so without causing a recession. This statement and decision by Federal Reserve officials caused the 10-year Treasury bond yield to drop from 4.21% to 3.94%, causing the value of the US dollar index to fall to around 102.43, its lowest level in the past four months. Powell added that his colleagues are discussing and considering the timing of starting to reduce interest rates and that what is very important to us is Don't make the mistake of keeping interest rates high for too long.
On Thursday, the market was eagerly awaiting important central bank meetings of Switzerland, England, and Europe, but as predicted, no significant changes or events occurred, and rates remained unchanged. The biggest difference between the Bank of England and the Federal Reserve was the tone of their presidents. Unlike Federal Reserve Chairman Andrew Bailey, Bank of England Governor Mark Carney stated that due to persistent inflation, we are likely to keep interest rates high for a longer period. Carney's tone was perceived as hawkish by the market and caused the pound to strengthen against the dollar.
After the important decisions of the central banks of Switzerland, England, and Europe, gold continued its upward trend to around the important $2050 level. On Thursday, the market was waiting for retail sales and weekly jobless claims reports from the US. All of these reports were better than economists' predictions and caused the dollar to strengthen in the market. For example, net retail sales in the US, which were predicted to drop from zero to negative one percent, surprisingly increased by two percent. The weekly jobless claims report, which was expected to decrease from 221 to 219, surprisingly announced a decrease of 202,000.
Finally, the last working day of the week arrived, and the only important report for the dollar and gold was the Purchasing Managers' Index (PMI) for services and production, which was better for the former and worse for the latter than market predictions.
there will be no significant news for the dollar and gold on Monday, December 18th. The only important news on Tuesday will be the release of Canada's Consumer Price Index (CPI). On Wednesday, the market will be waiting for the UK's CPI report and the US Conference Board Consumer Confidence Index. Thursday will bring important news for the US, including the final Gross Domestic Product (GDP) report and the weekly jobless claims report. Finally, on the last working day of the week, the market will be waiting for the important Personal Consumption Expenditures (PCE) report for the US. It is expected to be a quiet week with little volatility.
Weekly Technical Analysis of Gold:
Important support levels for gold:
If gold starts to decline, its first important support level will be $2,010. If market bears push it below this level, the next important support level will be $1,990. Finally, if gold falls below this level, the next critical support level will be $1,970.
Important resistance levels for gold:
Finally, we have compiled some statistics from Wall Street analysts for you:
Market analysts have varying opinions on the outlook for gold prices in the upcoming week, but overall, there are balanced indicators with the possibility of an increase in price.\
Reasons for optimism:
4. Market expectations: Many market participants expect the Federal Reserve to lower interest rates in the near future, which can also help gold.
Reasons for caution:
3. Short-term correction: The recent upward trend in gold prices may experience a short-term correction.
Conclusion: