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Gold Price Dips: Eyes on Crucial US Data and Fed

Gold Price Dips: Eyes on Crucial US Data and Fed

Gold prices continue to face selling pressure for the second consecutive day, driven by reduced expectations for a March Fed rate cut and a modest USD uptick, Despite geopolitical risks, the gold price struggles amidst challenges ahead of key data and events this week.

Technical Analysis

On the daily chart, a shift in favor of sellers is evident as gold settled below the $2,024 rising trendline support, signaling a breakdown. The 14-day Relative Strength Index (RSI) is bearish, below the 50 level, suggesting potential weakness, Immediate support lies at Friday’s low of $1,995, with a further drop toward $1,965 possible, Gold buyers need to surpass the 21-day SMA at $2,005 for a recovery toward the $2,040 supply zone.

Read more : Gold Price Struggles Amid US Dollar Demand

Gold Price Key Levels and Challenges Amidst Selling Pressure and Market Dynamics

The November 20 low and the upward-pointing 50-day Simple Moving Average (SMA) at $1,965 pose a significant challenge for gold sellers, Before reaching the 50-day SMA, cracking the static support at $1,980 is essential, A breach of these levels could lead to a sharp decline.

Fundamentals Driving Market Caution

Investors tread cautiously as the week unfolds with critical event risks for gold, including the US Consumer Price Index (CPI) inflation data and the Federal Reserve (Fed) interest rate decision, Friday’s positive US Nonfarm Payrolls data reduced March Fed rate cut expectations, impacting gold prices, The unexpected drop in the Unemployment Rate to 3.7% tightened the labor market, shifting rate cut bets to about 43%.

Global Influences on Gold Price

Gold’s corrective downside is accentuated by the underlying strength of the US Dollar, driven by renewed concerns about China’s deflation and geopolitical tensions with Yemeni Houthis, Ongoing threats in the Red Sea and rocket attacks at the US embassy in Baghdad contribute to market uncertainties. The Israel-Hamas conflict and China’s CPI fall further add to investors’ edge.

Market Outlook and Domination Factors

Risk trends, Fed expectations, and US Dollar dynamics are set to dominate gold prices amidst a quiet US economic docket on Monday, The potential for a horizontal escalation in geopolitical tensions and economic indicators will continue steering the market in the coming days.


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