2023-11-26 22:47:00
(Original title: Gold market forecast: Powell, US GDP and PCE inflation data are coming, gold prices may rise towards 2040)
Huitong Finance APP News——
Driven by the weakening of the U.S. dollar, spot gold closed up more than $20 last week and stood at the $2,000/ounce mark. FXStreet analyst Eren Sengezer wrote an article last Friday (November 24) that the outlook for gold remains bullish. Gold prices in the coming week may be affected by important U.S. economic data and speeches by Federal Reserve officials.
Spot gold prices rose sharply last week by US$21.83, or 1.1%, to close at US$2,002.48 per ounce. Last week, gold prices hit a high of $2,007.57 per ounce.
Philip Steible, chief market strategist at Blue Line Futures, said that the U.S. dollar index weakened in the past week due to weak economic data, which should prompt a shift in Federal Reserve policy and bring tailwinds to gold prices in 2024.
After falling 1.9% last week, the U.S. dollar index fell another 0.4% last week, and is expected to have its worst monthly performance in a year.
Jane Foley, senior currency strategist at Rabobank, said economic data has provided plenty of evidence of a recession in the United States.
Powell’s speech and major U.S. data coming this week
The U.S. Bureau of Economic Analysis will release a revised annualized rate of third-quarter gross domestic product (GDP) growth on Wednesday.Sengezer said that if the growth rate is significantly lower than the initial value of 4.9%, this may put pressure on the dollar and help gold move higher.
In early Asian trading on Thursday, market participants will pay close attention to China’s National Bureau of Statistics manufacturing and non-manufacturing PMI data. Signs of improving business activity in China, the world’s largest gold consumer, could support gold, Sengezer said.
Later on Thursday, the United States will release the personal consumption expenditures (PCE) price index. Sengezer believes that unless the core PCE price index rises by more than 0.5% month-on-month in October, market expectations that the Federal Reserve will begin to lower policy interest rates in the second half of 2024 are unlikely to change.
Finally, the U.S. ISM Manufacturing Purchasing Managers Index for November will be released on Friday. An unexpected rebound above 50 could boost the dollar by the end of next week.
Investors will continue to pay close attention to comments from Fed officials ahead of a quiet period that begins on December 2. Federal Reserve Chairman Jerome Powell will speak next Friday.
CME Group’s “FedWatch” tool shows that the market expects only a 22% chance that the Fed will keep its policy rate unchanged at 5.25%-5.5% until June next year.
Sengezer pointed out that if Fed policymakers dampen market expectations and try to convince participants that they will not consider cutting interest rates for an extended period of time, the dollar may find a footing, making it difficult for gold to gain bullish momentum.
Gold technical prospect analysis
Gold’s daily chart shows that the relative strength index (RSI) is flat near 60, indicating that gold is still struggling to gather momentum despite maintaining a bullish bias.
Gold prices closed above the key level of $2,000 an ounce last Friday. Gold bulls will need to keep an eye on whether gold prices can hold this level.
Sengezer noted that technical buyers may take action once gold confirms support at $2,000 an ounce. In this case, $2010/oz and $2040/oz could be set as the next bullish targets.
(Gold Daily Chart)
On the downside, Sengezer added that the 20-day simple moving average (SMA) forms dynamic support near $1,980 an ounce.
Sengezer reminded that if the daily closing price of gold is below US$1,980/oz, it may start to fall towards US$1,950/oz (23.6% Fibonacci retracement of the latest upward trend) and US$1940-1935/oz (200-day moving average and 100-day moving average).
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