Gold rises or falls
In this article, we will discuss fundamental and technical analysis for gold as the most effective commodity and indicator in the forex market.
Gold as a safe and volatile capital is welcomed by many traders. This analysis was presented on Sunday, December 10, 2023.
After last Monday and with the beginning of the working day of the forex market, global gold managed to conquer its highest historical peak (i.e. the price of 2148 dollars), it started to fall or maybe even corrected for the rest of the week and lost its upward momentum.
Last week's events of gold in the forex market:
As you saw last week, due to the escalation of geopolitical tensions, global gold was able to conquer its highest historical peak around the price of 2150 dollars in the Asian trading session.
In fact, the tensions started when the Yemeni rebels attacked three commercial ships in the Red Sea in the continuation of the Israeli war, and the US attacked and shoot down all three drones in response. But gold, as the world's safe capital, suffered a big gap under the influence of fear, and Many traders who had expected gold to hit global highest price took their profits.
But In the following, the scenario changed from the point of view of fundamental
Then on Tuesday, the data released from China showed that the Caixin Service Purchasing Managers' Index managed to increase from 50.4 to 51.5 percent.
Of course, the work did not end there and the market was waiting for the important report of job changes.
According to the latest reports from the US Bureau of Labor Statistics, the number of job openings fell to 8.7 million on the last business day of October, from 9.3 million in September.
In another positive report, the U.S. ISM Services PMI increased to 52.7 in November from 51.8 in October, indicating acceleration and growth in the service business sector. And the yield rate of ten-year treasury bonds dropped to around 2%, and this important factor caused gold to find a support zone for itself.
US private sector employment rose to 103,000 in November. It is not bad to know that the market was waiting for the figure of 130,000 people, which was much lower than the market's predictions.
After this report, interesting things happened; First, the risk-averse atmosphere in the market allowed the US dollar to remain strong against its competitors regardless of its weak reports. The second and another interesting point was that global gold also remained stable in the same support range due to the drop in the yield of treasury bonds and did not experience further drops.
Later in the morning on Thursday, the General Administration of Customs of the People's Republic of China reported that China's trade surplus increased from 56.53 billion dollars to 68.39 billion dollars in November, and China's annual import decreased to 0.6% for the same period. This news ended its working day around the price of 2030 dollars.
Then Friday came, the same day that the market was waiting for the US jobs (NFP) report.
According to the latest reports, the US Bureau of Labor Statistics announced that the number of jobs created in the private sector increased to 199,000 in October. It is not bad to know that the announced figure was much better and higher than the number of 150,000 people last month and the prediction of 180,000 people by economic analysts.
The more important point was that the unemployment rate decreased from 3.9% to 3.7% in October and the ten-year Treasury bond yield immediately jumped up to 4.2% in response to this news. As a result, global gold price fall to around 2010 dollars.
Important events and economic news next week in the market:
Next week, before the traders want to prepare themselves for the New Year holidays, the market will have important economic news and events, and we have a volatile and risky end of the year.
The most important news of next week, which is very important in relation to the future policies of the Federal Reserve and the report of the US consumer price index (CPI), this news is going to be published on Tuesday next week.
As you know, October inflation (meaning monthly inflation) was unchanged; If, for any reason, the monthly inflation in November of the United States becomes negative, the American dollar will immediately begin to fall and global gold will move upwards.
Also, investors and traders are waiting for the report of monthly net inflation ( Core CPI), which will increase to 0.2 percent for the second month in a row. If for any reason the Core CPI rises to around 0.4%, the US dollar will increase greatly.
Wednesday of next week can be considered the most important event of the next week. The Central Bank of America is going to hold its last meeting of 2023 next week on Wednesday, which is to determine bank interest rates.
In addition, the Federal Reserve of America is going to announce its forecast of the summary of the revised economic situation of the United States, which is also known as the dot chart and with the abbreviation (SEP), in this important meeting.
Investors have predicted another increase in interest rates by the end of 2023 and a 50 basis point reduction in interest rates in 2024, if for any reason the authorities of the Central Bank of America have decided to change the interest rates from the range of 5.25 to 5.5 percent. give or even leave it unchanged, the market will witness very high fluctuations.
CME Group's popular interest rate forecasting tool is showing that about 60 percent of market participants believe the Federal Reserve will cut interest rates by 25 basis points by around March.
Don't forget that financial market traders and investors will eagerly follow the dot chart report to detect any changes in the Federal Reserve's policies.
Meanwhile, Federal Reserve Chairman Powell's last press conference of the year could also influence XAU/USD's performance after an immediate reaction to the SEP.
Powell is likely to dodge from the Fed's macro policy change as early as 2024 and not mention it because the Fed may still rely on a "data-driven" approach.
The next most important event next week is the European Central Bank (ECB) and the Bank of England (BoE) meeting to set interest rates, which is scheduled to take place on Thursday.
If, for any reason, unlike the Federal Reserve, it adopts a more cautious policy regarding fundamental changes in macro-banking policies, the market will immediately reflect this.
If this scenario happens, the EURUSD and GBPUSD currency pairs will both start to get stronger and the weakening of the US dollar will help gold and cause it to rise.
On the contrary, if the authorities of the two central banks of Europe and England are in favor of reducing interest rates, the US dollar will start to get stronger and gold will fall again.
Weekly technical analysis of gold:
If you look at the gold daily chart, you will see that last week the bottom of the gold price was $1994 and the ceiling was $2148, which dropped by 3.26%.
The (RSI) indicator shows that gold has lost its upward momentum and the possibility of further corrections is not far off.
Important support levels for gold:
If gold starts to fall, the first important support level will be $2000. If the market bears go below this area, the next important level is $1980. Finally, if gold goes below this area, the next important level will be the very important area of $1960.
Important gold resistance levels:
If gold rises, the first important resistance level will be $2020. If the market bulls are above this area, the next important trend level is $2060. Finally, if gold crosses this zone, the next important level will be $2080.
Advice to traders:
Gold is known as the most accepted commodity of economic power in the market. As a result, macroeconomic decisions that affect the value of the currency of countries with large economies and determining the world, or important news that leads to changes in monetary or inflationary policies, such as the speeches of the Federal Reserve and the head of the European Union, etc. Or indicators affecting economic growth that express the speed of growth or stagnation of a country's economy greatly affect the value of money against gold. For this reason, reliable sources such as
economic calendars should be used in gold analysis in addition to technical analysis.
