. Gold Surges on Fed Pause: Reaches 6-Month Peak

Gold Surges on Fed Pause: Reaches 6-Month Peak

28 Nov 2023

Gold prices hover at a six-month peak as Fed pause bets grow.

FUNDAMENTAL OVERVIEW:

In Tuesday’s Asian trading, gold prices experienced a marginal increase, maintaining a six-month high amid escalating speculation that the Federal Reserve will refrain from further interest rate hikes.

The expectation of numerous economic indicators this week maintained positive sentiment for the yellow metal as investors awaited further indications of slowing U.S. economic growth and a decelerating Chinese recovery, bolstering the demand for safe-haven assets.

The dollar declined to its lowest point in three months during overnight trading, supporting gold and other metal prices as investors speculated that there would be no further rate hikes from the Fed. However, the greenback stabilized to some extent in Asian trade, with additional cues from the Fed expected later in the week.

The price of gold (XAU/USD) breached the horizontal barrier at $2,008-2,010 and reached the $2,018 area on Monday, marking its highest level since mid-May. Despite this breakout, the precious metal struggles to capitalize on the momentum and enters a bullish consolidation phase on Tuesday. A modest recovery in the US Dollar (USD) from nearly a three-month low, supported by an increase in US Treasury bond yields, along with positive risk sentiment, becomes a significant factor limiting gains for the non-yielding gold during the early part of the European session.


GOLD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

Gold is currently trading within an up channel.

Gold is positioned above all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a positive trend.

Immediate Resistance level: 2018.65

Immediate support level: 2000.01

HOW TO TRADE GOLD

After an initial upward movement, gold retraced and entered a consolidation phase. Subsequently, it found support and resumed an upward trajectory. Currently, gold is trading in the vicinity of a crucial resistance zone, and a breakthrough in this zone could pave the way for further gains.

TRADE SUGGESTION- STOP BUY – 2023.66, TAKE PROFIT AT- 2052.33, SL AT- 2009.33.