VOT Research Desk
The price of gold is cheering new bids above the psychological mark of $1,750 in what appears to be another down day for the US dollar (USD).
Due to holiday-slack trading circumstances and Thanksgiving Day in the United States this Thursday, investors are expected to cling onto the recent increase in the price of gold.
The dovish US Federal Reserve (Fed) November meeting minutes and discouraged top-tier US economic announcements have severely hurt the US Dollar and US Treasury bond yields.
A strong majority of participants thought that a decrease in the pace of increase would likely soon be appropriate, according to the FOMC minutes, adding thata slower pace in these circumstances would better allow the Committee to assess progress toward its goals.
The manufacturing and services sector tracking S&P Global preliminary Composite PMI Output Index for the United States dropped from a final reading of 48.2 in October to 46.3 this month, indicating increased recession risks in the largest economy in the world. In response to an increase in layoffs in the US IT industry, the weekly Jobless Claims in the US reached three-month highs of 240K.
In the midst of a slowdown in the American economy, markets disregarded the 1% increase in US durable goods orders statistics.
The Federal Reserve almost raised rates by 50 basis points (bps) in December as a result of the highly significant US events, which also caused a steep decline in the US dollar and US Treasury bond yields while driving up the price of gold.
Gold Technical Analysis:
The price of gold finally produced a bull flag confirmation after closing Thursday above the resistance of the declining trendline, which was at $1,737.
The upside break opens doors in the direction of the $1,787 three-month high. Bulls will initially need to clear this week’s high, which is close to $1,770.
The upward-sloping 21-Daily Moving Average (DMA) crossed the somewhat bearish 100-Daily Moving Average (DMA) for the upside, validating a bull cross and supporting the bullish potential.
The rise upward is supported by the 14-day Relative Strength Index (RSI), which is pointing north above the midline.
On the other hand, there is a substantial support level at Monday’s low of $1,733, below which the convergence of the 21 and 100DMAs at $1,712 will be tested. The November 10 low of is considered the last line of defence for the price of gold.
