Article by: ETO Markets
Gold prices (XAU/USD) have stabilized around $… after recent fluctuations, influenced by expectations of a cautious Federal Reserve stance on rate cuts. This has driven US Treasury yields higher and supported the US Dollar, creating headwinds for gold despite support from geopolitical risks and trade war concerns. Traders remain cautious ahead of the release of US Consumer Price Index (CPI) data, a critical indicator for Fed policy decisions and the commodity's near-term trajectory. Meanwhile, geopolitical tensions escalate with Israel's military actions in Syria and Ukraine's push for increased defence funding and NATO support. Amid global economic shifts, including anticipated rate cuts by the Bank of Canada and European banks, the Fed's outlook remains uncertain, with hawkish comments from officials tempering expectations of significant rate reductions. The CPI report is expected to signal modest inflation increases, likely shaping market sentiment and gold's performance ahead of the Fed's December policy meeting.
From a technical perspective, the breakout above the $…-… zone and the strengthening daily chart oscillators suggests a bullish outlook for gold prices (XAU/USD). On the downside, support near $…, marking the starting point of the bullish outlook, is expected to limit risks, with $… (a two-week low) serving as an additional key support level. On the upside, sustained gains above $… could propel prices toward resistance at $…. Clearing these levels would signal the end of the recent corrective phase and reinforce bullish momentum, potentially driving gold toward the $… zone, followed by $… and ultimately the record high near $….
