By the analytical department of RoboForex
Gold prices fell by more than 3% to USD 2,650 per troy ounce, due to the surge in the US dollar influenced by Donald Trump‘s definitive victory in the US presidential election. Gold prices held near three-week lows on Thursday, reflecting continued pressure from the robust dollar.
Market sentiment is changing as investors expect a more conservative approach from the Federal Reserve to rate cuts. Trump’s victory, seen as pro-inflation due to his protectionist policies, could prompt the Fed to maintain higher lending rates to counter inflation risks, thereby reducing the attractiveness of non-paying assets. no yield, such as gold.
Today’s focus is clearly on the Federal Reserve’s interest rate decision, which is expected to be a 25 basis point cut. This news has already been incorporated by the market, thus influencing current gold prices.
Gold’s future movements will largely depend on the Fed’s comments and subsequent rate decisions. Although rate cuts are expected, the speed and depth of these reductions will be crucial to the attractiveness of gold.
Technical analysis of XAU/USD
Gold market momentum recently peaked at 2790.00, after which a consolidation range formed below this level. Breaking out of this range down opened the way for a significant correction, with gold forming its first corrective wave. The short-term target is 2617.40, with a possible extension to 2575.75 if the downward trajectory continues. The MACD indicator supports this bearish outlook, with its falling signal line marked below zero, suggesting further declines.
The hourly chart draws a developing descending wave aimed at 2635.65. If this target is reached, a correction rebound to 2683.11 could occur before further declines continue to 2617.17, which represents the main target in this bearish phase. The Stochastic Oscillator indicates near-term potential for upside, with its signal line approaching the 80 level, suggesting a brief corrective bounce before resuming its descent.
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