#GoldTechnical analysis#24K99 News: This week, spot gold closed with a sharp drop of over 2%, settling slightly above $2650 per ounce. FXStreet analyst Eren Sengezer wrote on Friday (November 29) analyzing the gold price trends for this week and predicting the outlook for gold prices next week.
Sengezer pointed out that despite a rebound on Friday, gold prices closed lower this week.technical aspectsThe outlook indicates that sellers will hesitate in the short term. Key employment data from the usa and headlines about geopolitical issues may continue to influence gold prices.
Spot gold closed this week with a drop of $65.41, down 2.41%, at $2650.44 per ounce.
Sengezer wrote that gold prices dropped significantly on Monday due to easing geopolitical concerns and attempted to recover losses for the remainder of the week. The macroeconomic data related to employment released by the usa may change expectations regarding the federal reserve's policy decisions in December and trigger the next major movement in gold prices.
What happened to gold this week?
Sengezer pointed out that after the news emerged that Donald Trump nominated fund manager Scott Bessent as Secretary of the Treasury of the usa, risk flows dominated the actions in the financial market, and gold began to face heavy put pressure this week.
When assessing the market's reaction to this development, analyst Stephen Spratt from industrial bank noted that the market viewed Bessent as a "safe candidate," which might lead to some "relief rebound" in US Treasury bonds after the market opened on Monday, as the risk of a more unorthodox candidate was eliminated.
UBS analyst Giovanni Staunovo expressed that some market participants believe that Bernette's negative impact on the trade war is relatively small.
Despite the selling pressure around the dollar and the drop in US Treasury yields helping to limit gold's decline during the europe trading session, the easing of geopolitical tensions led to further declines in gold prices during the second half of Monday's trading session. After reports of a ceasefire agreement between israel and Hezbollah, gold continued to decline sharply on that day.
Spot gold closed on Monday down $90.53, a drop of 3.33%, marking the largest single-day drop since June 7.
Commodity strategy adviser Daniel Ghali of JPMorgan Securities stated that Trump appointing Bernette as Treasury Secretary further eliminates some of the risk premiums associated with the United States. More importantly, the ceasefire agreement between Israel and Lebanon further pushes down the price of gold.
In early trading on Tuesday, gold prices briefly fell to $2600 per ounce but ultimately stabilized, closing slightly higher. As the benchmark 10-year US Treasury yield dropped to its lowest level in nearly a month, below 4.3%, gold continued to rise, increasing for the second consecutive day.
Meanwhile, amid mixed macroeconomic data, the dollar remains weak, helping gold prices hold their ground mid-week. The usa Census Bureau reported that durable goods orders increased by 0.2% month-on-month in October, below the market expectation of 0.5%. The usa Department of Labor announced that for the week ending November 23, the number of initial unemployment claims fell from the previous week’s 0.215 million to 0.213 million. Finally, the usa Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) price index, rose 2.3% year-on-year in October, up from 2.1% in September, in line with market consensus, while the core PCE inflation annual rate slightly increased from 2.7% to 2.8%.
The usa financial markets were closed on Thursday for the Thanksgiving holiday, leading to narrow fluctuations in gold prices. After the bond market resumed activity on Friday, the yield on the 10-year Treasury note continued its decline from earlier in the week, giving gold a bullish momentum, rising above $2650 per ounce.
Non-farm payrolls may trigger a gold market reaction next week.
Sengezer pointed out that the usa calendar will release macroeconomic data related to employment next week, which could drive the market's pricing of the usa Federal Reserve's interest rate decision at its last policy meeting of the year.
On Wednesday, Automatic Data Processing will release private sector employment data. The market expects that November's ADP private sector employment will increase by 0.166 million. Sengezer stated that if this data exceeds expectations, it could reignite the optimism seen on Friday.non-farm payroll dataand lead to a decline in gold prices.
Affected by hurricanes and labor strikes, usa's October non-farm employment data increased by 0.012 million, with investors expecting a decisive rebound in November's non-farm employment data and November wages.Non-farm employmentThe forecast reaches 0.183 million. Sengezer noted that if this figure exceeds 0.2 million, it may fuel expectations that the Federal Reserve will maintain its policy in December, thereby pushing up US Treasury yields and impacting gold prices negatively. On the other hand, if the data is disappointing, reaching or falling below 0.15 million, it may keep hopes for a 25 basis point rate cut alive, opening the door for gold to rise before next weekend.
According to the cme's "Federal Reserve Watch Tool," the market currently believes that the probability of the Federal Reserve cutting rates by 25 basis points next month is approximately 65%.
Gold's technical outlook for next week
Sengezer pointed out that from the daily chart of gold,Relative Strength Index(RSI) is above 50, reflecting insufficient bearish pressure.
Sengezer stated that on the upside, the 23.6% Fibonacci retracement of the rising trend since June and the 50-day simple moving average (SMA) form the first resistance area at $2670/ounce. If the gold price rises above this level and starts using it as support, technical buyers may show interest. In this case, $2700/ounce (static level, integer level) may be seen as the next obstacle, with subsequent resistance at $2720/ounce (static level) and $2760/ounce (static level).
(Spot gold daily chart source: FXStreet)
On the downside, Sengezer added that the first resistance for gold prices might be at $2600/ounce (38.2% Fibonacci retracement level), followed by $2570/ounce (100-day moving average) and $2540/ounce (50% Fibonacci retracement level).
