Gold Surges to Six-Month High Amid Dollar Decline
Weak Dollar and Global Tensions Fuel Gold's Recent Rally
Gold prices surged to a six-month high recently, driven by growing confidence that the US Federal Reserve won't raise interest rates further.
The precious metal benefited from a declining dollar, which has dropped over 3% against various currencies this month. Weaker US economic data added to the belief that lending rates in the country might remain unchanged for the rest of the year.
Gold tends to rise during times of heightened geopolitical tensions, and recent conflicts like the situation in Gaza have contributed to its upward momentum.
On the daily candle chart (below) we can see that the Volume Weighted Average Price (VWAP) from the October lows as served as a useful guide for estimating pullbacks. And having bounced from the anchored VWAP earlier this month, we can place another VWAP on our chart (thinner gold line) anchored to the recent November swing lows.
Gold (spot price) Daily Candle Chart
Past performance is not a reliable indicator of future results
Drilling down to the detail of the 4hr candle chart shows that gold has broken and close above resistance during the Asian session. Should the breakout hold, a retest of the major resistance zone created by the April and May highs looks a reasonable scenario.
Gold (spot price) 4hr Candle Chart
Past performance is not a reliable indicator of future results
Risk Management:
The price of gold is highly sensitive to fluctuations in the US dollar, geopolitical tensions, and economic growth indicators. Ongoing conflicts, such as the one in Gaza, are expected to keep gold's volatility elevated. Additionally, this week's economic calendar features Federal Reserve Beige Book and revised US Q3 GDP figures published on Wednesday, which could impact the price of gold.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Gold prices surged to a six-month high recently, driven by growing confidence that the US Federal Reserve won't raise interest rates further.
The precious metal benefited from a declining dollar, which has dropped over 3% against various currencies this month. Weaker US economic data added to the belief that lending rates in the country might remain unchanged for the rest of the year.
Gold tends to rise during times of heightened geopolitical tensions, and recent conflicts like the situation in Gaza have contributed to its upward momentum.
On the daily candle chart (below) we can see that the Volume Weighted Average Price (VWAP) from the October lows as served as a useful guide for estimating pullbacks. And having bounced from the anchored VWAP earlier this month, we can place another VWAP on our chart (thinner gold line) anchored to the recent November swing lows.
Gold (spot price) Daily Candle Chart
Past performance is not a reliable indicator of future results
Drilling down to the detail of the 4hr candle chart shows that gold has broken and close above resistance during the Asian session. Should the breakout hold, a retest of the major resistance zone created by the April and May highs looks a reasonable scenario.
Gold (spot price) 4hr Candle Chart
Past performance is not a reliable indicator of future results
Risk Management:
The price of gold is highly sensitive to fluctuations in the US dollar, geopolitical tensions, and economic growth indicators. Ongoing conflicts, such as the one in Gaza, are expected to keep gold's volatility elevated. Additionally, this week's economic calendar features Federal Reserve Beige Book and revised US Q3 GDP figures published on Wednesday, which could impact the price of gold.
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
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