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Gold (XAU) Daily Forecast: Inflation, Fed Policies Weigh on Gold Prices at $2,632
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Key Points:
- Gold prices hover near $2,632 as rising Treasury yields and a strong dollar weigh heavily on the non-yielding metal.
- Persistent inflation keeps Fed cautious on rate cuts; markets price in a 70% chance of a December rate reduction.
- Core PCE inflation rose to 2.8% in October, signaling stubborn inflationary pressures despite robust consumer spending growth.
In this article:
Market Overview
Additionally, the Commerce Department reported a 2.8% annualized growth rate for the third quarter, driven by robust consumer spending, which surged 3.5%.
Labor market data also reflected resilience, with a slight decline in weekly jobless claims. However, October’s Durable Goods Orders missed expectations, rising only 0.2% versus the forecasted 0.5%. This mixed data reinforced market expectations of a cautious Federal Reserve approach to rate cuts.
Market Outlook: Fed and Fiscal Policy in Focus
Despite the strength in economic indicators, the market is pricing in a 70% likelihood of a Federal Reserve rate cut in December. However, uncertainties loom over fiscal policy, with speculation about Treasury Secretary nominee Scott Bessent’s potential focus on budget deficit controls. Such measures could temper the rise in Treasury yields, providing limited relief for gold.
Geopolitical tensions, including the ongoing Russia-Ukraine conflict and concerns over proposed tariffs, add layers of uncertainty. While these risks may offer some support to safe-haven assets like gold, the strengthening dollar remains a significant headwind.
Gold’s near-term trajectory hinges on Federal Reserve policy signals, economic data, and geopolitical developments. Until the metal breaks above critical resistance levels, the bearish sentiment may persist, keeping prices under pressure.
Short-Term Forecast
Gold prices remain under pressure near $2,632, with $2,629 acting as a pivot. A breakout above $2,651 could signal recovery, while a drop below $2,608 may trigger further losses.
Gold Prices Forecast: Technical Analysis
Gold prices are trading at $2,632.61, down 0.13%, as the market wrestles with mixed signals. The metal is hovering above a key pivot point at $2,629.61, suggesting cautious bullish sentiment.
Immediate resistance lies at $2,651.77, aligning closely with the 50-EMA at $2,643.20 and the 200-EMA at $2,650.37. A breakout above these levels could pave the way for a move toward $2,678.56 or higher.
On the downside, support is anchored at $2,608.12, where gold recently completed a 61.8% Fibonacci retracement. A sustained break below this level could trigger sharper declines toward $2,589.60. For now, traders should watch the $2,629 pivot closely, as it will likely dictate gold’s near-term direction.
About the Author
Arslan Aliauthor
Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.
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