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Gold: Today's Move Indicates Prices Could Start Sliding Soon

Published 29/01/2024, 08:03
Updated 09/07/2023, 11:31

Despite a rollover gap-up opening this week, Gold futures could remain under selling pressure on Monday as Friday’s stronger-than-expected economic data on Dec. Personal Spending and Pending Home Sales looks hawkish for the Fed policy and the yellow metal.

Undoubtedly, gold has had support since Friday after the announcement of the Dec. PCE deflator, the Fed’s preferred measure of inflation, rose less than expected, which seems dovish for the Fed policy.

However, the gold futures are currently discounting the chances for a 25 basis point rate cut at 2% for the FOMC meeting on Jan. 30-31 and about a 48% chance for a 25 basis point rate cut for the following meeting on Mar. 19-20.
Gold Futures Daily Chart

In the daily chart, gold futures are facing stiff resistance at $2050.47, despite a gap-up opening on the first trading session of this week as the formation of double-crossover by the displacement of 9DMA and 18 DMA below the 50 DMA which ensures the continuity of selling pressure this week.

On the upper side, only a breakout above the second resistance at $2053 could keep the trend upward, but the thick presence of big bears below the next resistance at $2063 will continue to trigger sell-offs during this week.

On the other hand, if the gold futures find a breakdown below the significant support at $2030, a steep slide could continue to push the gold prices to hit a new low before Feb. 9, 2024.

Gold Futures witnessed extreme volatility since last Wednesday and faced extensive selling pressure below the golden limit at $2048 by the big bears.

Finally, I conclude that the yellow metal is likely to witness wobbly moves on Tuesday and Wednesday before finding the steep slide at a 74º angle soon after the outcome of the FOMC meeting.

Watch my attached video, which I uploaded on Jan. 20, 2024.

Disclaimer: The author of this analysis may or may not have any position in the Gold futures. All the Readers are requested to take any long or short trading position at their own risk.

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