Gold: Today's Move Indicates Prices Could Start Sliding Soon
Satendra Singh | Jan 29, 2024 03:03
Despite a rollover gap-up opening this week, Gold futures could remain under selling pressure on Monday as Friday’s stronger-than-expected economic data on Dec. Personal Spending and Pending Home Sales looks hawkish for the Fed policy and the yellow metal.
Undoubtedly, gold has had support since Friday after the announcement of the Dec. PCE deflator, the Fed’s preferred measure of inflation, rose less than expected, which seems dovish for the Fed policy.
However, the gold futures are currently discounting the chances for a 25 basis point rate cut at 2% for the FOMC meeting on Jan. 30-31 and about a 48% chance for a 25 basis point rate cut for the following meeting on Mar. 19-20.
In the daily chart, gold futures are facing stiff resistance at $2050.47, despite a gap-up opening on the first trading session of this week as the formation of double-crossover by the displacement of 9DMA and 18 DMA below the 50 DMA which ensures the continuity of selling pressure this week.
On the upper side, only a breakout above the second resistance at $2053 could keep the trend upward, but the thick presence of big bears below the next resistance at $2063 will continue to trigger sell-offs during this week.
On the other hand, if the gold futures find a breakdown below the significant support at $2030, a steep slide could continue to push the gold prices to hit a new low before Feb. 9, 2024.
Gold Futures witnessed extreme volatility since last Wednesday and faced extensive selling pressure below the golden limit at $2048 by the big bears.
Finally, I conclude that the yellow metal is likely to witness wobbly moves on Tuesday and Wednesday before finding the steep slide at a 74º angle soon after the outcome of the FOMC meeting.
Watch my attached video, which I uploaded on Jan. 20, 2024.
Disclaimer: The author of this analysis may or may not have any position in the Gold futures. All the Readers are requested to take any long or short trading position at their own risk.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.