(MENAFN- Daily Forex)
The ongoing strength of the US dollar is negatively impacting Gold prices, which are now approaching the crucial support level of $2600 per ounce for the bears. Furthermore, the losses of the gold market reached the support level of $2604 per ounce at the time of writing the lowest price analysis in a month and a half. Selling pressures on gold continue until the markets react to the US inflation data and a series of speeches by US federal Reserve officials this week, in order to gauge the path of US interest rates in light of Trump's second presidency.
Last week, the Federal Reserve cut US interest rates by 25 basis points as expected but indicated a cautious and deliberate approach to future cuts. This is in line with speculation that the Federal Reserve may slow down and reduce the pace of rate cuts, as the policies of the US president-elect - which focus on raising tariffs, cutting taxes, and eliminating regulatory restrictions - are expected to widen the deficit and stimulate inflation.
Meanwhile, data showed that China, a major gold consumer, saw its inflation rate hit a four-month low in October, while producer price deflation deepened, despite increased stimulus to support the economy. Elsewhere, Russia's gold reserves hit an all-time high of $207.7 billion in October, according to the country's central bank.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Factors Affecting the Gold Market:
The US dollar index DXY, which measures the performance of the greenback against a basket of other major currencies, rose to 105.5 at the start of trading this week, its highest level since early July, extending a six-week winning streak after gaining about 0.6% last week. Amid this performance,“Trump deals” remain dominant as traders expect that Donald Trump's policies on taxes and deregulation will Favor companies and are likely to push inflation higher, limiting the ability of the Federal Reserve to cut US interest rates.
According to the economic calendar, this week, major economic data releases, including US consumer and producer prices, retail sales, and industrial production, will be in the spotlight, along with speeches by several Federal Reserve officials, who may provide more insights into the Fed's plans. Currently, the probability of a 25-basis point cut in US interest rates in December is nearly 69%, down from about 80% last week, before the presidential election Market Gains This Year:
Amid a remarkable year, the gold price index has risen more than 30% since the beginning of 2024; recording monthly gains in eight of the past ten months. Strong momentum from global geopolitical tensions, especially in the oil-rich Middle East region with huge financial solvency. This is in addition to concerns about the policies of the new US administration, especially after Trump's victory in the presidential election, which has an interesting history with financial markets and the global economy.
In addition, the gold market will be affected by the fate of the US central bank's policy under Trump, who has often interfered in the bank's decisions. Last September, the US Federal Reserve officials made a surprise 50 basis point interest rate cut; the first US interest rate cut in nearly four years Price Analysis and Forecast Today:
EURUSD Chart by TradingView
According to gold analysts, the price of gold is still in a downward correction path. Technically, the price of gold ounce has remained above the 50-day and 100-day exponential moving averages (EMA). Also, the Relative Strength Index (RSI) and the MACD formed a bearish divergence pattern. Therefore, the price of gold is likely to continue declining, and the $2600 per ounce level will be crucial for the bears' dominance over the trend. Thus, it is preparing for stronger losses if Trump hints in his policy towards the strength of the US dollar
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