Ziwox Weekly Gold analysis

Gold Analysis – December 4, 2023

Fundamental View

The fundamental outlook for gold suggests a mix of factors influencing its trajectory. Analysts predict a bullish trend, with forecasts ranging from $1,800 to $2,060 per ounce in 2023, and a continued upward trend in 2024. However, challenges like waning demand, driven by rising real rates and a stronger US dollar, persist, undermining gold’s strength. Gold is influenced by fluctuations in the US dollar and yields. The rise of gold by 14% from November 2022 to early February 2023 was supported by a less hawkish tone from the US Federal Reserve.

The significant activity of buying gold by central banks with the net purchase of 800 tons of gold last year has been the main factor behind the positive performance of gold. In the absence of a clear catalyst, the increase in the price of gold on the day may be due to the execution of profit limits of long positions. In this case, we can have the possibility of a short-term retreat in the price of gold.

Latest Gold’s Rally

Gold crossed its August 2020 high due to expectations of a US interest rate cut and the cautious stance of the Federal Reserve. The Fed’s comments fueled the gold rally. Gold prices were further boosted by Federal Reserve Chairman Powell’s comments on the restrictive monetary policy stance. The comment led to a decrease in yields and the US dollar, favoring the rise of gold.

There is always FED in between

Amid speculation of impending interest rate cuts, Powell cautioned against premature expectations. This led to a cautious market, with gold prices reflecting a hesitancy to react to signs of the Federal Reserve delaying rate cuts.

Market Sentiment and Influencing Factors

Gold prices fell today from Monday’s highs, perhaps reflecting the market’s reaction to signs that the Federal Reserve is in no rush to cut rates.
This sentiment was reflected in the Treasury market as the 10-year yield rose. The upcoming US labor force data, which is expected to show rising wages and Iran’s steady unemployment rate, could weigh on gold trends.

๐Ÿ“… Economic Calendar

Technical View

The medium-term outlook for gold looks upbeat, however, the potential for real rates to rise in the face of deflation may weigh on gold investments, while net long positions have increased. ETF holdings have not risen significantly, reflecting mixed sentiment. It is in the gold market.

Any talk and possibility of an interest rate hike by the Federal Reserve can bring the price of gold back to the 1850 area, and if the expectations of an increase in interest rates by the Federal Reserve continue to increase as in the past weeks, the price of gold will be above 50-20.

Our direction for gold remains bullish and dips can be bought. Significant levels for a buy scenario are the 2035 levels.

Long depended on Fed expectation by Alisabbaghi on TradingView.com

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Affecting news/events for gold


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Navigating the Global Gold Market: Insights and Analysis

Key points:

  • Historical Resistance: The $2,000 to $2,050 range has acted as a significant barrier to the growth of global gold prices, showcasing a pattern of resistance over the past three years.
  • Repeated Compression: Despite multiple attempts, the gold market has struggled to break free from the compression imposed by this resistance range.
  • Federal Reserve Influence: The anticipation of a potential interest rate reduction by the Federal Reserve introduces a new variable that could impact the gold market dynamics.
  • Market Speculation: Investors are closely monitoring the situation, speculating on whether the Federal Reserve’s decision could finally propel gold prices beyond the historical resistance.

Analysis

The global gold market has witnessed intriguing patterns in the past three years, with a notable resistance range between $2,000 and $2,050. This critical threshold has thwarted the upward trajectory of global gold prices on three occasions. However, as we observe the market dynamics approaching this resistance for the fourth time, a new factor emerges into playโ€”news of the Federal Reserve’s interest rate reduction.

Gold levels, fundamental trader EA

The Federal Reserve’s Influence:

A significant development on the horizon is the news of the Federal Reserve considering an interest rate reduction. Such announcements from central banking authorities have historically reverberated across precious metal markets, acting as catalysts for shifts in investor sentiment. As the gold market approaches the resistance range once more, the anticipation is palpableโ€”will the Federal Reserve’s decision be the catalyst needed to propel gold beyond the $2,050 barrier?

Optimism Amidst Patience:

While the potential impact of the Federal Reserve’s decision looms large, it’s crucial to emphasize the virtue of patience in navigating the intricacies of financial markets. The historical resilience of the resistance range suggests that overcoming it may require a sustained effort. Investors and stakeholders must brace themselves for a potentially protracted period of waiting, understanding that the interplay of economic factors and geopolitical events is intricate.

Conclusion:

As we stand at the crossroads of economic anticipation and cautious optimism, stakeholders in the global gold market are urged to adopt a balanced perspective. The confluence of factors, including the potential influence of the Federal Reserve, underscores the need for informed decision-making and a measured approach. In the ever-evolving world of finance, adaptability and strategic insight will be paramount for those seeking to navigate the complexities of the gold market successfully.

๐Ÿ‡บ๐Ÿ‡ธ ๐Ÿ‡ช๐Ÿ‡บ ๐Ÿ‡ฌ๐Ÿ‡ง ๐Ÿ‡จ๐Ÿ‡ฆ ๐Ÿ‡ฏ๐Ÿ‡ต ๐Ÿ‡จ๐Ÿ‡ญ ๐Ÿ‡ฆ๐Ÿ‡น ๐Ÿ‡ณ๐Ÿ‡ฟ


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Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

Gold has been unappealing to buyers for three weeks. Strong economic data and high inflation led to a drop in gold prices. For the third consecutive week, the price per ounce of gold fell, leading to renewed discussions of a June rate hike. This shift in interest rate projections is the primary explanation for the decrease in gold’s value.

The inflation growth rate has not decreased yet!

Macroeconomic data was the main driver of the market. The durable goods index, consumer spending, and US PCE inflation all exceeded projections. US Federal Reserve emphasized the PCE index, which peaked at 4.7% in April. The near 5% US inflation merits ongoing interest rate adjustments. 0.25% hike anticipated by investors.

The US dollar strengthened

While the ounce of gold is down, the US dollar is up. According to analysts, the gold ounce will likely be under pressure until the beginning of the third quarter of 2023 due to strengthening interest rate expectations. Meanwhile, the only debt crisis of the US federal government can support the gold ounce. Negotiations on raising the federal government’s debt ceiling are ongoing and have yet to come to a conclusion.

๐Ÿ“… Economic Calendar

Technical View

It is still too early to talk about the formation of a price floor in the market. It is true that an ounce of gold has dropped from its historical peak of $125, but there is still no news of a price floor. It seems that the fair price of an ounce of gold is in the range of 1923 to 1945 dollars assuming US interest rate hikes in June and July.

According to the weekly chart of XAUUSD, the price has reached the upward trend line following the downward reversal from the rate of $2055. In this week’s trading, the ounce of gold will face the trend line again. It seems that the bearish momentum in the market has increased.

If selling pressures increase and the upward trend line is broken, the market structure will change to a downward trend its possible that the price drop to the first support area of $1,923, and the key support of $1,871

But if the trend line turns into support and the price crosses above the partial resistance of $1950, the market can start a new upward movement first up to the trend rate of $2000.

Weekly gold analysis by Alisabbaghi on TradingView.com

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Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

Is gold still supported?

Although the ounce of gold had a rough week, falling almost $50 and experiencing its worst performance since February, we saw a bullish return to the market on Friday.

One of the biggest drivers for the ounce of gold was the strengthening of the US dollar. The price of an ounce of gold has an inverse relationship with the value of the US dollar. The US dollar strengthened in response to the country’s economic data and changed interest rate expectations. But last Friday, the head of the US Federal Reserve said interest rates may not rise much. He is concerned about the credit crunch in the American banking industry. Powell said that “financial stability tools have helped calm the situation. However, the developments in the American banking sector are such that they make financial and credit conditions difficult and will most likely harm economic growth, employment, and inflation. For this reason, perhaps there is no need for a quick and large increase in interest rates. And it happened that on Friday gold was supported in the range of 1950 and now it is trading in the range of 1980.

๐Ÿ“… Economic Calendar

In the coming week, the FOMC Minutes will be published. In the meantime, the GDP data will be updated and the desired inflation index of the Federal Reserve (PCE) will be at the center of attention.

US federal government debt crisis

This is a sign that the Federal Reserve may keep interest rates on record from June. After the words
The head of the US Federal Reserve, market interest rate expectations were weakened. From the point of view of the market, the possibility of an increase of 0.25 percentage points in the interest rate in June has reached 10%. Before this, the market was preparing to stop interest rate hikes from June. Several officials of the US Federal Reserve have backed away from the idea of stopping interest rate hikes. Even hopes for a rate cut at the end of 2023 have weakened.
Before the words of the head of the US Federal Reserve, the market was preparing for a 0.25 percentage point increase in the interest rate in June and had abandoned the expectation of a rate cut until the end of 2023. For this reason, we saw a sharp fall in the price of an ounce of gold. But it seems that the Federal Reserve Chairman’s comments have caused a change in interest rate expectations.

Technical View

According to analysts, it is expected that the price of an ounce of gold will experience an upward return from the current levels. However, there is a risk of an ounce of gold falling into the $1,900 range. The first resistance of the market is the 1980 range and then the 2000 dollar range. The support area of the market is in the range of 1960-1950 dollars. If negotiations to increase the federal government’s debt ceiling fail, the price of an ounce of gold could stabilize above $2,000.

Is gold still supported? by Alisabbaghi on TradingView.com

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Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

Buyers of gold in recession, or sellers of it for a stronger dollar?

Volatility in the bond market and uncertainty about interest rate cuts are pushing the dollar higher, dimming the appeal of gold (XAU).

Last week, the recovery of the US dollar affected the price of gold (XAU) and put pressure on gold. Because market participants assessed the possibility of the Federal Reserve raising interest rates in May. However, there are still many buyers and markets for gold, who see the fear of stagnation more strongly.

Now for this week. There are many things in the US economic calendar that will help traders know what to expect from the Fed. Investors are monitoring Economic growth data (GDP), jobless claims on Thursday, and PCE data on Friday. The GDP print is expected to grow at an annual rate of 2.0% during this period, which means that a recession is not imminent. And If the PCE index prints much higher than expected, it reduces the likelihood that the Fed will hold off on rate hikes in May, especially if economic data is generally positive.

With this data, Investors evaluate the interest rate increase in May. Although the market expects a 25 basis point hike on May 3, uncertainty surrounding the possibility of a rate cut this year has caused volatility in the US bond market. The volatility of the bond market causes the dollar to move.

๐Ÿ“… Economic Calendar

The market is currently looking at a 25 percent hike, with the direction of travel determined by whether the Fed will hold off on interest rate changes after that. While this could support gold prices, the recent market rally and overly technical conditions mean there is still scope for a downside if the Fed’s rate outlook is confirmed. According to the CME FedWatch tool, there is an 84.6% chance of a 25% rate hike in May, with interest rate cuts expected later in the year. Higher interest rates reduce the attractiveness of non-yielding bullion.

Technical View

Gold has taken a downward trend in the four-hour time frame. This precious metal has locked itself in the $1960 to $2020 area. It shows that gold needs some drivers to rise or fall. Any sign of information that leads traders to fear further recession could push gold to the $2020-$2048 highs. But what we think is the better-than-expected print for the US economy makes more downward pressure on XAU.
Gold is currently trading at the price of $1982 dollars and is on a dynamic resistance. There is a possibility of a slight rise for gold at the beginning of the week, but we don’t have any rush to trade. If the economic data encourages us to sell gold, we will wait and do it in the $2000 to $2020 area, and if we going to buy gold, we will do it in $1960 or in the important key area of 1920 dollars.

Calendar events

Affecting news/events for gold

Thu Apr 27: 

๐Ÿ‡บ๐Ÿ‡ธ USD Advance GDP q/q and Unemployment Claims

Fri Apr 28:

๐Ÿ‡บ๐Ÿ‡ธ USD Core PCE Price Index and USD Employment Cost Index


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Gold price, affected by the weakening of the US dollar

Gold prices are under pressure from a weaker US dollar, and China’s economic recovery, but uncertainty about the Federal Reserve’s monetary policy is limiting growth.

Economic data suggest the economy is not yet close to recession, giving the Federal Reserve room to continue raising interest rates, despite being thought to be closer to the end of the rate hike cycle than other global central banks.

Traders are monitoring comments from Fed officials ahead of the April 22 blackout before the May 2-3 meeting.

The 10-year Treasury yield rose 8 basis points to 3.602 percent and the two-year U.S. Treasury yield rose 9.3 basis points to 4.196 percent, which typically reflects interest rate expectations.

According to CME’s FedWatch Tool, market expectations for a 25-point hike at the May meeting have risen to more than 86% (up from 78% on Friday).
This is the trigger for the decline of gold.
But on the other hand, China’s economic recovery weakened the dollar
However, gains in gold prices were limited by uncertainty over the US Federal Reserve’s monetary policy stance. Investors sought more clarity on the issue, which affected gold demand.

Despite this, news of China’s economic recovery picked up in the first quarter, with the country’s gross domestic product growing 4.5 percent year-on-year, beating expectations. This development increased demand for riskier assets, which in turn put some pressure on the US dollar and led to gold growth.
From a technical point of view, gold is trading within the ascending channel and is now at the bottom of the channel. The resistance level of 2003.55 is very important and the upward return of the price above this level will bring more buyers into the market. We should wait for the price reaction to the rate of 2003.55.

Overall, gold prices rose on Tuesday due to a combination of factors, including a weaker US dollar and news of China’s economic recovery. However, uncertainty over the US Federal Reserve’s monetary policy stance limited gains in the precious metal.


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Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

Gold is still under buying pressure but it is at an important level

In the past week, gold was fixed above 2000 dollars. This consolidation was done right above the $2000 and $2002 area. Important and psychological area.
The momentum is still bullish and can rise again to its historical high. We mean the area of 2060. But this price jump definitely needs a catalyst as a driver.

The instability of the economy, the uncertainty in the decisions of the Federal Reserve to interest rate increasing cycles, the purchase of gold by central banks, the crisis of banks under the pressure of recession and inflation, as well as the decrease in bond yields make gold more attractive for buying than ever before.

If in the coming week, the employment data is higher than expected or if the inflation increases a lot, they can make gold fall sharply and return it to the previous level.

But any disappointing data or even close to expectations will stabilize gold in the current areas and even towards higher levels.

๐Ÿ“… Economic Calendar


Technical View

Technically, gold is slightly overbought at current levels. But what is seen in the candlesticks (downward shadows) shows the pressure on buyers in this area.

If there is no better than expected data for the US economy (employers and CPI), any drop in the price of gold to a lower level can be considered as a correction and another opportunity for buying gold again.

any price drop considered as a correction and a BUY opportunity by Alisabbaghi on TradingView.com


Calendar events

Important events for gold:

USD CPI and Core CPI, FOMC meeting on Wed

Ziwox calendar on 2023-04-10

Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

Gold Growth stopped at a strong level of $2000

Last week, we mentioned the buy sentiments of gold as a safe-haven asset.
Now that the market has priced banking crises what are the gold movement drivers?

Recession, yes fear of stagnation is remain. Fear of recession in the global economy remains and now the gold buyers are still in their long positions.

Why do the world’s banks buy gold?

On the other hand, the multi-polarization of economic powers and the formation of new regions in the east by China and Russia, and the declining influence of the US dollar as the global reserve currency has been the main driver of gold’s rally to the $2,000 level last week.
Undoubtedly, China and Russia intend to free themselves from the vortex of the global economy, which is heavily dependent on the US dollar. The concern about the extreme fluctuations of the dollar and the euro has caused the demand for gold to increase from the central banks of the world. Concerns about the trade war and the possibility of a currency war between China and the United States are also considered important factors.

Last week, we read in the news that China made its first liquefied natural gas transaction in yuan through the Shanghai Oil and Gas Exchange. Also, last week, China and Brazil announced that they will carry out trade and financial exchanges between them in Riel (Brazil’s currency) and Yuan, to which Saudi Arabia, the United Arab Emirates, and the Middle East have also been added. The result is less use of US dollars and more use of gold.

Technical View

The closing price in the previous month’s candle shows the strong power of major buyers of gold, and this defends the upward trend of gold in the long term.

From a technical point of view, we are currently in the overbought zone for Gold/XAU. This does not mean that gold will go down. Rather, we consider it only a price correction and collecting more liquidity at lower prices for new buyers.

$1955, $1937, and $1910 are our main support levels.

Gold Growth stopped at a strong level of $2000 by Alisabbaghi on TradingView.com

Calendar events

Mon Apr 3, ISM MANUFACTURING PMI (MAR)

Wed Apr 5, ADP NONFARM EMPLOYMENT CHANGE (MAR)

and on Fri Apr 7 NONFARM PAYROLLS (MAR) is our main event’s impact on gold.

Ziwox Weekly Gold analysis

Weekly gold Analysis

Fundamental View

A safe haven for every trader

At any time in history, if any risk enters the market, traders turn to safe areas to protect their assets.
In the past few months, gold has been the best safest place for all financial risks.
From recession to financial crises and recently banking problems. As a result, traders withdraw their assets from banks and keep them safe in gold.

In the last week, gold grew by about 9%, and the only reason for that is the gold’s paradise, traders took their money out of bankrupt banks and invested in gold.

Even before the financial crisis, many analysts believed that the possibility of a pivot in FED monetary policies was imminent. Now with the bank crisis, Sooner or later, this would happen. so the conditions are set for a bullish gold market.

Technical View

From a technical point of view, gold is in an over-bought area and retail traders may be thinking about short on these levels of gold. but what the smart money has entered into gold is heavy long. Therefore, in the short term, before breaking the last high resistance levels, 2000 and 2070 dollars, we will probably see the price of gold in side way.

On the other hand, Markets don’t rises and fall like a waterfall and need a correction, but in no way is this correction suitable for selling, you should lurk and wait to buy gold at lower levels.

$1946, $1911, and $1877 are the main support levels.

A safe haven for every trader by Alisabbaghi on TradingView.com

Calendar events

On Tuesday we have the Australian central bank’s meeting.
Wednesday is our volatile forex day. The FOMC and the FED interest rate decision will strongly impact the gold price. any sign of hawkish policy makes pressure on gold and any dovish policy pushes gold higher.

FED interest rate decision and FOMC press conference on Wed, Mar 22

Weekly gold analysis

โ—ฝ๏ธ With inflation decreasing and expectations of the FED hawkish policies withdrawal, gold was bullish in the past weeks

โ—ฝ๏ธ Signs of deflation have dampened the possibility of a 75bsp hike in September and weakened the dollar, but on the other hand, it has revived the stock market. This followed the adjustment in July’s CPI and PPI.

โ—ฝ๏ธ Due to the confusion after the latest inflation report (CPI, PPI), the market’s attention will be on economic growth data and Home sales. the housing sector is important for the economy that will be monitored for possible signs of recession.

โ—ฝ๏ธ July building permits and construction starts will be released on Tuesday and existing home sales on Thursday.

โ—ฝ๏ธ Despite intensifying fears of a recession due to negative pressure countering declining bond yields, recent positive data have had a complex effect on reducing risk-taking sentiment.

โ—ฝ๏ธ So a weak release of retail sales data could have a bigger reaction in the stock market, at least this time around. The dollar, however, may see a more limited decline as investors await the minutes of the Fed’s meeting to adjust their decision based on the Federal Reserve’s stance in September.

๐Ÿ”ป It is still too early to declare victory over inflation

๐Ÿ”ป According to analysts, the return of the dollar to the upward trend next week may put pressure on gold

๐Ÿ”ป A good release of retail sales and industrial production data will be consistent with Q2 GDP growth of 2-2.5% and will likely boost the Dela. The initial support for gold is in 1765

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