Gold prices demonstrated resilience in Asian markets today, recovering from recent declines and approaching monthly peak levels despite lower trading volumes due to the Thanksgiving holiday. The halt in the US dollar’s advance comes amid growing expectations that the Federal Reserve may pause its aggressive rate hikes. The precious metal is trading just below the critical $2,000 mark, with a significant resistance level at $2,010 yet to be breached.
On Wednesday, market sentiment was influenced by a more than 50% probability of Federal Reserve rate cuts by May 2024, which played a role in the USD’s dynamics, despite the Fed’s recent emphasis on maintaining higher rates or even tightening further if inflation remains uncontrolled. Economic indicators presented a mixed picture: the University of Michigan consumer sentiment survey indicated increased inflation expectations, while unemployment claims fell to a month-low of 209K, suggesting a tighter labor market. Conversely, a larger-than-expected decrease in durable goods orders highlighted concerns about slowing economic demand.
Technical analysis points to key levels for gold, with immediate support situated between $1,989 and $1,988 and additional support between $1,979 and $1,978. Should these levels fail to hold, gold prices may retest the 200-day Simple Moving Average (SMA) near $1,940. Conversely, a push above the formidable resistance at $2,010 could see prices aiming for intermediate resistance at $2,022.
In currency markets, the US dollar is notably weaker against major counterparts such as the New Zealand dollar (NZD) and the Japanese yen (JPY), while showing minor fluctuations against the euro (EUR) and British pound (GBP). The interplay between gold prices and USD dynamics continues to be closely watched by investors as they gauge the potential direction of Federal Reserve policy and its implications for financial markets.
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