Article by: ETO Markets

Gold prices fell for a second straight session on Thursday, weighed down by a stronger U.S. dollar. Trump's victory in the U.S. presidential election triggered the "Trump trade" that pushed the dollar to a four-month high, putting pressure on dollar-denominated gold prices. Market optimism and reduced safe-haven outflows have put gold prices under greater pressure. In addition, U.S. Treasury yields remained at their highest levels since July, further reducing gold's appeal as the opportunity cost of holding non-yielding assets increases.

Markets will be closely watching Thursday's Federal Reserve policy decision, which is expected to result in a 25 basis point interest rate cut. While this move could provide some support for gold, concerns about long-term inflation, combined with the risk of potentially high inflation from Trump's economic policies, including higher tariffs, larger fiscal deficits, and tax cuts, could make gold a Safe-haven assets are back in favor. Still, gold prices have not been significantly boosted by risk aversion stemming from developments in the Middle East, such as Iran's planned retaliation for attacks on Israel.

From a technical perspective, gold prices hovered around $… per ounce on Thursday, showing further bearish bias. On the daily chart, gold prices are below the 9-day and 14-day exponential moving averages (EMAs), and the 14-day relative strength index (RSI) is also below 50, reinforcing the bearish technical outlook.

If gold prices move further down, they could test the three-week low of $…. If they fall below this level, gold prices could further fall to the psychological level of $…. On the upside, $… is the key resistance level in the near term, followed by the 9-day EMA near $…. If gold prices can break through these resistance levels, they could challenge the all-time high of $… set on October 31 again.