The gold price moves within the ascending channel for more than a month. Despite the fall of the stock market, prices for oil, and many other assets, gold slowly but surely moves forward. And today the market participants can significantly influence the price level for the last time. Next week, within the period between Christmas and New Year, the activity of traders will seriously fall, and we most likely won’t see significant changes in quotes.
But before leaving for a long weekend, the market will have to feel the impact of a large amount of statistical data on the US economy. Part of the data was already published yesterday, and for gold, it turned out to be negative. Thus, GDP growth in the 3rd quarter was revised from 2.9% to 3.2%, and the number of jobless claims slightly swings in the range of 210-220 thousand.
All this shows that the US economy is quite resistant to the Fed policy tightening, and it means the tightening itself will continue. The high level of dollar rates is a serious negative factor for gold.
However, today the equally important indicator will be published — PCE Price Index, which according to the FED, measures inflation better than any other indicator. If it is expected to show a decline from 5% to 4.7% or lower, this could support gold quotes.
As for the prospects for the precious metal next year, the market has generally positive expectations. One way or another, the growth of interest rates in the world will soon be completed, but inflation is unlikely to quickly fall to the target levels of financial regulators near 2%. This situation can significantly increase the demand for gold.
If the statistics on inflation are favorable, the target for gold growth will be the upper limit of the arising channel around 1830.
We may offer you the following option of trading strategy:
Buy gold in a range of 1790 - 1800. Take profit – 1830. Stop-loss – 1780.
Also, traders can use Trailing stop instead of fixed Stop-loss at their disposal.