#GoldTechnical analysis#24K99 News: During the Asian session on Tuesday (November 12th), spot gold basically stabilized after yesterday's sharp decline, with the current price near $2622 per ounce. FXStreet's Chief Analyst Valeria Bednarik wrote an analysis on the technical outlook for gold.
Bednarik pointed out that due to continuous demand for the US dollar, spot gold fell on Monday and approached $2600 per ounce. Signs of Trump winning the 2024 presidential election and Republicans gaining full control of Congress have driven the US dollar higher.
Bednarik stated that despite recent oversold conditions, the price of gold may continue to fall below $2600 per ounce.
On Monday, primarily driven by a significant strengthening of the US dollar and the impact of Trump's election as US President on fiscal policy and rate cuts, spot gold closed down $64.75, a 2.41% decrease, at $2619.23 per ounce; with the lowest intraday price dropping to $2610.61 per ounce.
The US Dollar Index (DXY), tracking the US dollar against six major currencies, rose 0.52% on Monday to 105.50, touching 105.70 during the session, the highest since July.
ActivTrades Senior Analyst Ricardo Evangelista said: "The main reasons for the drop in gold prices are the strong usd, rising US Treasury yields, and increased risk appetite in financial markets - a trend that has intensified since Trump's victory in last week's presidential election."
Bipan Rai, Managing Director of BMO Global Asset Management, stated: "I believe the market is increasingly digesting the impact of a wave of red tide, benefiting the US dollar." He was referring to the comprehensive victory of the Republican Party led by Trump.
The latest data from the US "The Hill" shows that the US Republican Party currently has won 218 seats in the House of Representatives, surpassing the majority, gaining control of the House of Representatives. This means that the Republican Party has achieved a major victory, winning control of both houses of Congress in this election and the presidential election.
On November 5th, the United States held its once-in-four-years general election. In addition to electing a new president, this election also reelected all 435 seats in the US House of Representatives and 34 of the 100 seats in the Senate. To become the majority party in the House of Representatives, a minimum of 218 seats is required.
In addition to the United States, the tense situation in the Middle East also seems to be easing, dampening market risk aversion sentiment, thereby bearish for the price of gold.
According to the UK's Reuters, Israel said on Monday that progress has been made in ceasefire talks with Lebanon, hinting that Russia could play a role in preventing Hezbollah from rearming through Syria.
(Screenshot source: Reuters)
Israeli Foreign Minister Gideon Saar stated that Israel's war with Hezbollah is not over. He mentioned that the main challenge for any ceasefire agreement will be enforcement, despite some progress being made in the negotiations.
Sar said that Israel is cooperating with usa to reach a ceasefire agreement. He said that Israel hopes Hezbollah is located north of the Litani River and cannot rearm. The basic principle of any ceasefire agreement must be that Hezbollah cannot bring weapons from Syria into Lebanon.
Last Sunday, the Israeli newspaper 'Israel Today' reported that substantive progress has been made in diplomatic negotiations on the ceasefire proposal for Lebanon. This proposal requires Hezbollah to withdraw from north of the Litani River, prohibits its deployment near the Israeli border, and the Israeli Defense Forces will return to the international border.
Israel's best-selling newspaper 'New Message' reported on Monday that Israel and Lebanon have exchanged drafts through the usa envoy Hawks, indicating progress.
Short-term technical outlook for gold
Bednarik writes that from a technical perspective, the price of gold is expected to continue to decline. The price of gold is close to the $2600 per ounce mark, hitting a one-month low. Looking at the daily chart, gold is far below the currently flat 20-day (SMA); while the 100-day SMA and 200-day SMA are moving firmly upwards, still well below the current gold price level. In addition,Simple Moving Average technical indicatorsAlmost vertical downwards, far below the midline, reflecting strong selling interest.
Bednarik added that in the near termtechnical aspectsit shows gold will continue its decline. In the 4-hour chart, the bearish 20-period SMA accelerated downwards after breaking below the flat 200-period SMA, while providing intraday resistance near Monday's high. At the same time, the momentum indicator is almost vertically downwards.Relative Strength Index(RSI) maintains a downward slope, currently around 23, with no signs of exhaustion in the downward trend.
(Source: FXStreet)
Valeria Bednarik provides the latest key support and resistance levels for gold price:
Support levels: $2601.90 per ounce; $2588.70 per ounce; $2572.45 per ounce.
Resistance levels: $2627.10 per ounce; $2639.05 per ounce; $2651.00 per ounce.
At 10:13 Beijing time, spot gold was trading at $2621.76 per ounce.