For one more week the markets entered into a hype mood in strong expectations that the Fed will cut rates in May next year. Strong GDP figures of 5.2% annualized for Q3 only added a fuel to the market hype. The price of Gold reached levels above $2K, ending the week at level of $2.070. At the same time USD gained in strength during the week on the same hype. For one more time during the last two months, the price of gold completely lost its correlation with the USD, considering that the both assets were moving in the same direction at the same time. With a slowdown in hype, it could be expected that the negative correlation will return among these two assets, with probability that the price of gold would need to be corrected to the downside.
Buying orders prevailed in the market the whole previous week. The price of gold started the previous week around the level of $2K, reaching $2.070 as of the weekend. The RSI is moving within the strongly overbought market side, indicating that reversal might soon come. Moving average of 50 days crossed the MA200 counterpart from the down side, indicating a potential for the so-called “golden cross”. In technical analysis this is an indication of a potential trend change. However, the cross needs to be confirmed on charts within the next few days, in order to speak about trend change.
Charts are currently clearly showing a potential for a short reversal. The RSI is clearly indicating that the market is moving within the overbought territory. In addition, the gold completely lost its correlation with the USD, which would also require some corrections in the price of gold. In this sense, the price might revert back toward the $1.970 level. Still, such a move might need more than a week to reflect on charts. First, the price of gold needs to test the $2K support line.
Important news to watch during the week ahead are:
USD: ISM Service PMI for November, Non-Farm Payrolls for November, Unemployment Rate for November, Michigan Consumer Sentiment preliminary for December
Buying orders prevailed in the market the whole previous week. The price of gold started the previous week around the level of $2K, reaching $2.070 as of the weekend. The RSI is moving within the strongly overbought market side, indicating that reversal might soon come. Moving average of 50 days crossed the MA200 counterpart from the down side, indicating a potential for the so-called “golden cross”. In technical analysis this is an indication of a potential trend change. However, the cross needs to be confirmed on charts within the next few days, in order to speak about trend change.
Charts are currently clearly showing a potential for a short reversal. The RSI is clearly indicating that the market is moving within the overbought territory. In addition, the gold completely lost its correlation with the USD, which would also require some corrections in the price of gold. In this sense, the price might revert back toward the $1.970 level. Still, such a move might need more than a week to reflect on charts. First, the price of gold needs to test the $2K support line.
Important news to watch during the week ahead are:
USD: ISM Service PMI for November, Non-Farm Payrolls for November, Unemployment Rate for November, Michigan Consumer Sentiment preliminary for December
