Gold prices rise as Fed rates are expected to remain unchanged

Gold prices have stabilized near Friday's high as the dollar is declining following recent U.S. economic data.

Kyle Rodda, finance expert at Capital.com, noted that the market saw a shift in opinion regarding the Federal Reserve's (Fed) policy and the start of interest rate cuts. At the moment the yellow meta is trading differently than one would expect considering real earnings. It would take even worse data for the precious metal to rise above $2,000 an ounce, Rodda added.

Last week's U.S. labor market data showed a slowdown. U.S. retail sales in October fell 0.1% from September's reading. At the same time, the country's consumer price index remained unchanged over the same period, indicating a slowdown in inflation. This data strengthened the hopes among market participants that the Fed would start easing monetary conditions sooner compared to previous estimates. As a result, the dollar fell by 0.2%, reaching its lowest level in more than 2.5 months against other currencies.

Traders are now expecting the U.S. central bank to keep interest rates unchanged at its December 12–13 meeting, according to the CME FedWatch tool.

Investors are now eagerly waiting for the release of the Fed's minutes from its latest meeting this week. It may provide more clues regarding the interest rate trajectory.

According to Moody's rating agency, government costs cannot be offset by the country's unique credit advantages. However, amid rising interest rates and the absence of additional revenue-raising measures from the government, U.S. foreign debt will remain high.

Currently, gold once again has the potential to reach an all-time high.

Gold prices on the daily chart are showing an uptrend.

In terms of wave analysis, the price is forming the third ascending wave on the H4 timeframe. Breaking through the top of the first wave at the level of 2012 will strengthen the upward price movement.

Signal:

Short-term prospects for GOLD suggest buying. 

The target is at the level of 2080.00.

Part of the profit should be taken near the level of 2012.00.

A stop-loss could be placed at the level of 1915.00.

The bullish trend is short-term, so trade volume should not exceed 2% of your balance.