FxNews—Gold prices stabilized at around $2,650 per ounce on Thursday. This follows a sharp decline of more than 3% on Wednesday, dropping to the lowest in three weeks. The decrease in Gold’s value was driven by the strengthening of the dollar after Donald Trump was elected President of the United States.
The anticipation of higher interest rates set by the Federal Reserve has also contributed to Gold’s decrease in attractiveness as a safe-haven asset. Investors are reacting to Trump’s campaign promises, which include immigration reform, higher tariffs, tax reductions, and less regulation—policies that are expected to increase deficits and inflation.
Currently, all eyes are on the Federal Reserve, which is expected to announce a rate cut of 25 basis points later today.
Gold Technical Analysis – 7-November-2024
The XAU/USD’s bearish momentum eased close to the 78.6% Fibonacci retracement level at $2,640. Interestingly, the 4-hour chart formed a hammer candlestick pattern. Additionally, the Stochastic Oscillator and RSI 14 hover in the oversold territory, meaning the price could bounce or consolidate from this price.
Will Gold Trigger a Bullish Wave at the $2,670 Resistance?
That said, the immediate resistance rests at the 61.8% Fibonacci level, $2,670. From a technical perspective, if gold prices exceed the immediate resistance, a new bullish wave could form, targeting the 50% Fibonacci level at $2,690, backed by the bearish fair value gap.
Please note that the 61.8% and 50% Fibonacci levels offer a decent bid to join the bear market with a more decent price.
Bearish Scenario
Conversely, if bears close and stabilize the Gold’s price below the immediate support at $2,640, the downtrend will likely be triggered. If this scenario unfolds, the next bearish target could be the October 9 low at $2,600.
- Support: 2,640 / 2,600
- Resistance: 2,670 / 2,690