Today’s analysis offers an in-depth look at the key drivers shaping the gold market, with a focus on both fundamental and technical factors. This report aims to equip investors with the insights needed to navigate the gold market with confidence and precision.
Gold prices edged higher on Monday as growing bets for another Federal Reserve rate cut in December boosted demand for the safe-haven asset. Geopolitical tensions and renewed trade war fears provided additional support for gold’s upward momentum.
A major geopolitical event unfolded over the weekend as Syrian rebels seized control of the capital, Damascus, effectively ending President Bashar al-Assad’s 13-year regime. Assad and his family reportedly fled to Russia, seeking asylum. This development marks the end of over 50 years of his family’s rule in Syria. In response, the United Nations is expected to convene an emergency closed-door meeting to discuss the situation.
Investors remain cautious amid escalating geopolitical risks from the Middle East, even after last week’s ceasefire deal between Israel and Hezbollah. Additionally, market participants are closely watching the upcoming US Consumer Price Index (CPI) data, following stronger-than-expected US Nonfarm Payrolls data on Friday. The data showed job growth of 227K in November, surpassing the forecast of 200K, while the unemployment rate ticked higher to 4.2% as expected.
These factors combined with expectations for a 25-basis-point (bps) rate cut by the Federal Reserve later this month are keeping gold prices supported. However, the potential for a less dovish stance from the Fed continues to underpin the US Dollar, capping gold’s upward momentum.
Gold prices are fluctuating within a range while maintaining support at the critical $2,600 level. Buyers remain hesitant to take aggressive positions, but the 14-day Relative Strength Index (RSI) has ticked higher, approaching the 50 mark, supporting the case for a potential rebound. However, key technical levels suggest a cautious outlook.
Technical indicators suggest a neutral-to-bearish sentiment:
The gold market remains at a pivotal point, with specific support and resistance levels guiding potential price movements. Investors should watch for a break above $2,652 or below $2,577 to determine the next major move.