- Gold rally maintains its positive momentum intact fuelled by buying from China and safe-haven flows.
- The US Dollar’s moderate recovery is weighing on Gold.
- XAU/USD’s technical picture remains positive with price action standing above the last two week’s trading range.
Gold (XAU/USD) maintains a mild bullish tone on Tuesday. The tone shift by China’s Politburo, vowing further economic stimulus to support growth, and the resumption of Gold purchases by the People’s Bank of China (PBoC) are acting as a tailwind for the precious metal.
Other sources of support for Gold are the safe-haven flows triggered by the uncertainty in the Middle East, after the fall of Bashar al-Assad’s regime in Syria, and the political deadlocks in France and Germany.
Finally, growing bets that the Federal Reserve (Fed) will cut rates next week keep US yields close to multi-week lows, and provide additional support to the yieldless metal.
Daily digest market movers: A somewhat stronger Dollar is weighing on Gold’s recovery
- China’s PBoC reported buying 160,000 ounces in November after a six-month pause. This has boosted expectations of further Gold appreciation and will likely underpin speculative demand for Bullion.
- In Syria, the diverse rebel factions are starting negotiations to form a government while foreign powers like Israel and Turkey take positions. The increasing uncertainty in an already volatile region will underpin demand for the safe-haven Gold.
- The US Dollar is trading moderately higher awaiting Wednesday’s Consumer Prices Index (CPI) figures to clarify the Feds’s monetary easing calendar for 2025.
- The CME Group’s Fed Watch Tool reveals an 86% chance of a 25 bps Fed cut after the December 17-18 meeting and between two and three more cuts in 2025.
- US consumer inflation is expected to confirm that inflation remains sticky above the Fed’s 2% target rate. The headline CPI is expected to have ticked up to a 2.7% yearly rate, from 2.6% in October with the core CPI steady at 3.3% year-on-year.US Dollar PRICE TodayThe table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar. USDEURGBPJPYCADAUDNZDCHFUSD 0.16%-0.11%0.23%0.00%0.58%0.62%0.09%EUR-0.16% -0.26%0.03%-0.16%0.42%0.46%-0.07%GBP0.11%0.26% 0.29%0.10%0.69%0.72%0.18%JPY-0.23%-0.03%-0.29% -0.20%0.38%0.41%-0.11%CAD-0.01%0.16%-0.10%0.20% 0.57%0.61%0.09%AUD-0.58%-0.42%-0.69%-0.38%-0.57% 0.03%-0.49%NZD-0.62%-0.46%-0.72%-0.41%-0.61%-0.03% -0.52%CHF-0.09%0.07%-0.18%0.11%-0.09%0.49%0.52% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote)
Technical analysis: XAU/USD hovers right above previous range top
Gold rally is losing steam, with the US Dollar coming up on Tuesday but it remains steady above the top of the last two week’s trading range at $2,660.
Above here, the next target would be the $2,690 intra-day level and the November 24 high at $2,720. A bearish reaction below the mentioned $2,660 would bring the December 9 low at $2,630 back into focus, ahead of the channel bottom (November 26 and December 5 lows) at $2,605.
