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GOLD SUDDEN DROPPED

GOLDCeylon | 11.12.2023 | GOLD News

After hitting a record high around $2,150 an ounce at the start of the week, gold prices are heading into the weekend down more than 3%, testing critical support just above $1,995 an ounce. With a $150 swing this week, the gold market saw the most volatility since mid-August 2020, just after gold established its previous record high.

Ole Hansen, head of commodity strategy at Saxo Bank, said that Monday’s rally and subsequent selloff was not helpful for gold’s long-term price action.

“Technically, gold has a lot of work to do to make up for the damage that was done,” he said.

Along with overbought momentum, Hansen said the gold market has run too far ahead regarding potential rate cuts in 2024, which could keep prices below $2,050 an ounce in the near term.

SOURCE : KITCO NEWS

Some cold water was poured on a potential rate cut in March after employment data on Friday showed that the U.S. economy created 199,000 jobs last month, beating expectations. At the same time, the unemployment rate dropped to 3.7%, down from 3.9% in October.

“At the very least, we are going to see volatile markets and the room for a positive surprise for gold will be limited,” Hansen said.

Craig Erlam, senior market analyst at OANDA, said he is also expecting to see elevated volatility in gold in the near term.

“It really has been quite the week for the yellow metal and with US inflation and the Fed interest rate decision to come next week, the volatility may not be going anywhere,” he said.

Phillip Streible, chief market strategist at Blue Line Futures, said that he is expecting to see some downward pressure on gold. He added that after Friday’s employment report, it is unlikely Federal Reserve Chair Jerome Powell will shift his hawkish stance, even as the central bank is expected to leave interest rates unchanged.

Source : Kitco News

Source : Kitco News

PUBLISHED BY GOLDCeylon

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