Gold plummeted much lower, reaching a new two-week low of $1778. Following the publication of US economic statistics, including the Core PCE, the exchange rate is hanging around $1780.
Gold prices fell again on Wednesday, marking the fifth day in a row that it has fallen. The rally to $1800 was revealed to be short-lived as the Gold-to-Dollar exchange rate retreated to the negative. Recently, the price of Gold fell to $1778—a hundred Dollars below the previous week’s high.
The economic figures presented by the United States on Wednesday ranged from middling to positive. Personal earnings and expenditure increased more than predicted in October, new unemployment claims fell to their lowest level since 1969, and consumer confidence improved only a little, according to the Bureau of Labor Statistics.
On the negative side, the third-quarter GDP figure was revised down from 2.2% to 2.1%; durable goods orders fell 0.5%; and new home sales increased to 745 thousand units (annual rate), far short of the expected 800 thousand units.
Following the release of the statistics, US rates stayed near their weekly highs, boosting the US Dollar in the market and putting the Gold-to-Dollar ratio under pressure. The minutes of the Federal Reserve’s most recent meeting will be issued at 19:00 GMT on Wednesday.
Perspectives For The Near Future
XAU/USD CHART Source: Tradingview.com
The gloomy prognosis remains unchanged, particularly if prices continue to break and consolidate below every support level that they have lately broken. The price of Gold has fallen back below major moving averages (20, 55, 100, and 200 days).
If the price falls below $1780, the next support level is $1770, followed by the November low of $1758. The prospect of a rebound in prices, which should be viewed as a corrective move, could be enhanced if the consolation price rises above $1795 on the upside.
Gold appears to be on its way down, even lower, as there are no indications of stability insight. Even though the market has fallen for five days in a row, technical indicators are displaying severely oversold readings.
Fundamental Analysis of the XAU/USD
Real yields should rise, which should put downward pressure on Gold. In the opinion of the analysts at Credit Suisse, the yellow metal is now in the process of building a huge top.
Their base hypothesis continues to be that inflationary pressures are nearing a peak and that 10-year US Real Returns are forming a huge and significant bearish “wedge” reversal. This would imply that Gold is creating a massive and major top, assuming their analysis is true.
The chance of a retest of long-term key support at $1,691/77 is assessed as lower for support next at $1,759, whose loss might result in a retest of support next at $1,691/77. They believe that a large top would be formed beneath this later location at any point in the future.
Resistance at $1,877 is now projected to be reached, but only a break over $1,917 would indicate that the market is about to make a significant move higher.