Article by: ETO Markets
Gold prices are exhibiting increased volatility amid a complex interplay of market forces. Federal Reserve Chair Powell's recent Senate Banking Committee testimony has strengthened the US Dollar, creating immediate pressure on gold prices. The precious metal's immediate trajectory is being shaped by three key factors: the anticipated third consecutive rate cut in December's FOMC meeting, stalling progress in inflation reduction towards the Fed's 2% target, and rising US Treasury yields. Adding further complexity to the market dynamics are President-elect Trump's expanded tariff plans and ongoing geopolitical tensions in the Russia-Ukraine conflict and Middle East. The combination of these elements has created heightened market uncertainty, supporting gold's traditional role as a safe-haven asset despite current price pressures.
The technical landscape indicates a consolidation phase with a bullish bias, evidenced by the current price action near historic highs. Price momentum shows the metal maintaining its position above the key 50-day Simple Moving Average, suggesting underlying strength despite recent profit-taking from the $… peak. The Bollinger Bands configuration indicates expanding volatility, with the upper band providing immediate resistance at $…. RSI readings suggest room for further upside before reaching overbought conditions, while the MACD remains in positive territory, though showing signs of potential divergence. The price structure has established strong support at $…, where the lower Bollinger Band provides additional technical confluence. Immediate overhead resistance at $… represents a crucial level that, if breached, could trigger momentum toward the recent high of $….
