The price of gold rose slightly on Monday. This was due to weakening government bond yields in anticipation of U.S. inflation data coming this week.
Tim Waterer of KCM Trade says falling bond yields are helping the yellow metal to rise. U.S. 10-year government bond yields are now at July lows.
On Wednesday, the Federal Reserve (Fed) left the benchmark interest rate unchanged. However, according to central bank Chairman Jerome Powell's comments, as many as three cuts are expected in 2024.
According to InTheMoneyStocks.com market strategist Gareth Soloway, the Fed could come under political pressure ahead of the 2024 election. If that happens, the regulator will lower borrowing costs. This in turn will have a positive impact on gold prices.
Traders are also waiting for the publication of other economic data from the U.S. this week, including the November consumer expenditures report on Friday.
As forecast by Reuters analysts, the PCE index rose 0.2% last month, with annual inflation slowing to its lowest level since mid-2021 at 3.4%.
Markets now estimate the probability of a rate cut by the Federal Reserve in March at about 70%, according to the CME FedWatch tool.
Expectations of looser monetary policy in 2024 have weighed on the U.S. dollar and led gold and silver higher. The yellow metal's price rose 1.8% over the past week. Silver prices, meanwhile, rose by about 4.2%.
The daily chart of gold prices is showing an uptrend.
In terms of wave analysis, the price is currently forming the second corrective wave, which is part of an overall trend. Fundamental factors at the end of this week may create favorable conditions for buying the precious metal. However, expectations of these events may enhance the correction and, as a consequence, reduce the cost of gold to the support level of 1785 dollars.
Signal:
Short-term prospects for gold suggest buying around the 1790.00 level.
The target is at the level of 2090.00.
Part of the profit should be taken near the level of 2040.00.
A stop-loss could be placed at the level of 1930.00.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
