The technical structure of spot gold prices is expected to turn bullish, breaking through $2000.
FXStreet strategist Devani Mehta noted in a report that after the post-Thanksgiving calm, gold prices on Black Friday sluggishly approached the $2,000 mark. However, attention is turning to the US S&P Global preliminary manufacturing and services Purchasing Managers' Index (PMI) data for some new directional impetus for gold prices. With most US traders enjoying an extended Thanksgiving holiday, gold prices may see another day of range-bound trading. That said, thin liquidity could trigger a surge in gold price volatility, especially as the weekly close approaches. Weekend fund flows and the reaction to the US PMI could also be key catalysts influencing gold prices in the coming day. The US S&P Global Manufacturing PMI for November is expected to contract to 49.8, down from 50.0 in October. The Services PMI is expected to fall to 50.4 from 50.6 previously. Any new signs of weakening US economic resilience could boost dovish expectations for the Fed, further depressing the dollar and providing a much-needed boost to gold prices. Meanwhile, the prevailing cautious market sentiment offers no stimulus to gold prices. Expectations of Fed rate cuts next year continue to give gold buyers hope, but a renewed strengthening of US Treasury yields and an easing of geopolitical tensions between Hamas and Israel could curb any upward attempts. A first ceasefire since the war between Israel and Hamas began on Friday morning means fighting in Gaza will stop for four days in exchange for Hamas releasing 50 of the 240 people it is holding hostage. Technically, gold's path of least resistance appears to be upward, as depicted by the bullish technical structure on the daily chart. A bullish crossover of the 50-day simple moving average (SMA) and 100-day SMA on Wednesday, coupled with a bullish 14-day Relative Strength Index (RSI), opens the door for further gains. However, gold needs a daily close above the $2,000 threshold to sustain a meaningful upward trend, with immediate resistance at the multi-month high of $2,009. Above the latter, new buying opportunities may emerge, calling for a test near the mid-May high of $2,020. On the other hand, immediate support lies at the 21-day moving average of $1,977, with the $1,955-1,950 area potentially rescuing gold buyers below that support. A convincing break below this confluence could threaten the November 14 low of $1,944, with the rising 200-day moving average below that level targeting $1,941.
Time:
2023-11-25 10:01
FXStreet strategist Devani Mehta noted in a report that after the post-Thanksgiving calm, gold prices on Black Friday sluggishly approached the $2,000 mark. However, attention is turning to the US S&P Global preliminary manufacturing and services Purchasing Managers' Index (PMI) data for some new directional impetus for gold prices.
With most US traders enjoying an extended Thanksgiving holiday, gold prices may see another day of range-bound trading. That said, thin liquidity could trigger a surge in gold price volatility, especially as the weekly close approaches. Weekend fund flows and the reaction to the US PMI could also be key catalysts influencing gold prices in the coming day.
The US S&P Global Manufacturing PMI for November is expected to contract to 49.8, down from 50.0 in October. The Services PMI is expected to fall to 50.4 from 50.6 previously. Any new signs of weakening US economic resilience could boost dovish expectations for the Fed, further depressing the dollar and providing a much-needed boost to gold prices.
Meanwhile, the prevailing cautious market sentiment offers no stimulus to gold prices. Expectations of Fed rate cuts next year continue to give gold buyers hope, but a renewed strengthening of US Treasury yields and an easing of geopolitical tensions between Hamas and Israel could curb any upward attempts.
The first ceasefire since the war between Israel and Hamas began on Friday morning, meaning fighting in Gaza will stop for four days in exchange for Hamas releasing 50 of the 240 people it is holding hostage.
Technically, as depicted by the bullish technical structure on the daily chart, the path of least resistance for gold prices appears to be upward.
The bullish crossover of the 50-day simple moving average (SMA) and 100-day SMA on Wednesday, coupled with the bullish 14-day Relative Strength Index (RSI), has opened the door for further gains.
However, gold prices need a daily close above the $2,000 threshold to sustain a meaningful uptrend, with immediate resistance at the multi-month high of $2,009. Above the latter, new buying opportunities may emerge, calling for a test near the mid-May high of $2,020.
On the other hand, immediate support lies at the 21-day moving average of $1,977, with the $1,955-1,950 area potentially rescuing gold buyers below that support.
A convincing break below that confluence area could threaten the November 14 low of $1,944, with the rising 200-day moving average below that level targeting $1,941.
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