#GoldTechnical analysis#24K99 News On Wednesday (November 13), during the Asian session, spot gold suddenly surged significantly in the short term, with the gold price currently rising to around $2612 per ounce, up nearly $15 intraday. FXStreet senior analyst Dhwani Mehta's latest article on Wednesday analyzed the technical trend of the gold price.
(Spot gold 30-minute chart, source: 24K99)
Mehta wrote that gold sellers hope to take profits before the release of US CPI inflation data. As the rebound triggered by Trump's trade stagnates, the dollar and US Treasury yields fall together.
Mehta stated that due to the daily chart, the gold price is showing a weakening trend, which is likely to trigger a short-term bullish correction. Relative Strength Index(RSITo maintain a put position, the gold price must find support above $2645 per ounce for a rebound.
Previously on Tuesday, as the US dollar index hit a more than four-month high, increasing the holdings of non-dollar buyers, the gold price plunged to a near two-month low.opportunity costGold price plummeted to a near two-month low.
Spot gold closed sharply down 21.20 US dollars on Tuesday, a decrease of 0.81%, at 2598.03 US dollars per ounce; the price of gold fell to as low as 2589.40 US dollars per ounce during trading.
According to the CME Group's 'FedWatch Tool', the market currently expects a 60% chance of another 25 basis point rate cut by the Federal Reserve in December, lower than about 84% a month ago.
Mehta stated that on Wednesday, all eyes turned to the highly anticipated US CPI data to determine whether the Fed would continue cutting interest rates after December.
At 21:30 on Wednesday Beijing time, the US Consumer Price Index (CPI) report for October will be released, which is the most important US economic data this week.
Market expectations are that the year-on-year growth rate of the US CPI in October will rise from 2.4% to 2.6%, while the month-on-month growth rate is expected to remain stable at 0.2%. The year-on-year growth rate of the core CPI in October is expected to remain at 3.3%, and the month-on-month growth rate is expected to stay at 0.3%.
Mehta pointed out that if the CPI and core CPI data unexpectedly decline, it will strengthen dovish expectations surrounding the Fed's interest rate cut path. Conversely, an inflation report higher than expected may increase market expectations that the Fed may reconsider future rate cut measures.
However, any reaction to the US CPI data may be short-lived, as the market will next focus on Fed Chairman Powell's speech on Thursday. Powell will deliver a speech on 'Global Outlook' at an event hosted by the Dallas Fed.
At the same time, a series of new speeches by Fed policymakers will also be closely watched. Minneapolis Fed President Kashkari, Dallas Fed President Kaplan, Kansas City Fed President Schmidt, and St. Louis Fed President Bullard are scheduled to speak later on Wednesday during the US trading session.
How to trade gold?
From the daily chart, it can be seen that the price of gold closed slightly below $2600 per ounce on Tuesday. However, gold buyers are trying to make a comeback, with the 14-day Relative Strength Index (RSI) rebounding towards the 50 level.
Mehta pointed out that if short covering strengthens the rebound momentum, the gold price may target the 50-day Simple Moving Average(SMA) support turned resistance at $2650 per ounce. Before that, buyers must overcome the Tuesday high of $2627 per ounce.
If the gold price continues to rise, the static resistance at $2670 per ounce will come into play.
(Spot gold daily chart source: FXStreet)
However, Mehta warned that if U.S. inflation data exceeds expectations, the gold price may turn downwards and fall towards the 100-day moving average of $2541 per ounce, close to the low point on September 18.
However, sellers may encounter strong obstacles near $2585 per ounce.
At 11:58 Beijing time, spot gold is trading at $2612.24 per ounce.
