#GoldTechnical analysis.#24K99 News: On Wednesday (December 11), in the Asian market's late session, spot Gold suddenly dropped significantly, falling to a low of $2674.69 per ounce, a decline of nearly $30 from earlier daily highs. FXStreet Analyst Haresh Menghani wrote an article on Wednesday analyzing the technical trends of gold prices.
(Spot Gold 15-minute chart Source: 24K99)
Menghani stated that gold prices retreated from a high of over two weeks, with bulls becoming cautious ahead of the USA CPI report release. Bets on the Fed being less dovish and rising US bond yields supported the dollar and pressured gold prices.
However, Menghani pointed out that geopolitical risks, trade war concerns, and rate cut bets should help limit the decline in gold prices.
At 21:30 Peking time on Wednesday, the USA November Consumer Price Index (CPI) report will be released, which may impact the Fed's interest rate path at the meeting on December 17-18.
Economists surveyed by the Dow Jones expect that the USA's CPI in November will grow by 0.3% month-on-month and by 2.7% year-on-year. Last month, this data increased by 0.2% month-on-month and by 2.6% year-on-year.
The core CPI in the USA for November, excluding volatile food and Energy prices, is expected to rise by 0.3% month-on-month, remaining unchanged from October. The year-on-year increase of the USA's core CPI for November is expected to stay at 3.3%.
Analysts indicate that a CPI data that meets expectations is unlikely to hinder interest rate cuts, but if the data shows stagnation in inflation progress, the likelihood of the Fed cutting rates for the third consecutive time may decrease.
According to the CME Group's "FedWatch Tool", the market currently expects the probability of the Federal Reserve lowering interest rates by 25 basis points at the December policy meeting to be over 85%.
Menghani stated that the key CPI report from the USA next week will provide guidance for the Federal Reserve decision-makers, which in turn will affect the dollar and provide new momentum for Gold.
How to Trade Gold?
Menghani pointed out that fromTechnical aspectLooking at the situation, the Gold price this week broke through the area of 2650-2655 USD/ounce and the subsequent upward trend is favorable for Call traders. In addition, the oscillation indicators on the daily chart have been gaining positive traction and are still far from the overbought area. This in turn confirms the recent positive outlook for Gold prices and supports the prospect of some Buy opportunities near the above area.
Menghani stated that this should help limit the downward space for Gold prices around the 2630 USD/ounce area; once it falls below this area, the downward trajectory of Gold prices may further extend towards the 2600 USD/ounce integer level.
(Spot Gold 4-hour chart Source: FXStreet)
On the other hand, Menghani added that if the Gold price continues to break through 2700 USD/ounce, it may further extend towards the 2720-2722 USD/ounce barrier. The subsequent resistance level is around the 2735 USD/ounce area, and if this resistance is breached, it would indicate that the corrective decline from the historical high reached in October has ended, turning the inclination favorable for Call traders.
This momentum may push the Gold price up to the 2758-2760 USD/ounce barrier, then advance towards the 2770-2772 USD/ounce area and the 2790 USD/ounce area (record high).
As of 13:34 Beijing time, the spot Gold price is reported at 2678.38 USD/ounce.
