Bullish Trend Intact with Possibility of Short-Term Correction

Summary:

On Wednesday, the US released the ADP employment data and Q3 GDP figures. The ADP report showed impressive gains, achieving the largest increase since July 2023, while the GDP growth rate came in below expectations, highlighting ongoing challenges in the US economy.

BUY XAUUSD

Close Time

CLOSED

2777.61

Entry Price

2835.00

2735.00

4829.05 +39.92 +0.83%

426.1

Pips

Loss

2735.00

2734.99

Exit Price

2777.61

Entry Price

2835.00

Fundamentals

On Wednesday, the ADP employment report, often referred to as the "small non-farm payrolls", indicated that US employment grew by 233,000 in October, marking the largest increase since July 2023. This result contrasted with expectations for a slowdown in employment due to factors such as the Boeing strike and two severe hurricanes impacting the East Coast in October.

Additionally, US GDP for Q3 showed an annualized growth rate of 2.8%, down 0.2 percentage points from Q2 and below the forecasted 3.1%, marking the first time this metric has missed expectations in 2023. This points to continued challenges in the US economy, with the market still expecting a 25 basis point rate cut in November.

Gold prices initially dipped but quickly resumed an upward trend following these data releases. The market appears unconcerned with the negative implications of the ADP data for gold, as concerns over the US economy lend support to gold prices.

It's also worth noting that Friday's release of the US non-farm payroll data is still highly anticipated. Although the ADP report and the official non-farm payrolls draw on different samples, they tend to show similar trends. As a result, the market awaits Friday's report for further confirmation of the employment situation.

Technical Analysis

Looking at the daily chart, gold prices have shown an upward trend and have consistently reached new highs. However, technical indicators are starting to shift as prices rise: the Relative Strength Index (RSI) has corrected from an overbought level, and momentum indicators have dropped from October highs. These shifts suggest possible short-term pullback pressure. Nonetheless, all moving averages are running upward, indicating that the long-term uptrend remains intact.

Bullish Trend Intact with Possibility of Short-Term Correction_1

From the 4-hour chart, gold has been consolidating below the 1.618 Fibonacci extension level at $2,790.64 after reaching a new high of $2,789.74, showing a weakening of upward momentum and increasing short-term pullback risk. If gold can break above the $2,790.00 resistance level, it would open up room for further gains, with the first target being the psychological level of $2800.00, followed by $2840.00.

In the short term, gold may pull back toward the $2,759.00 support level, but the overall trend remains bullish. Therefore, a trend-following approach to buying the dips is recommended.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2762.00

Target Price: 2835.00

Stop Loss: 2735.00

Valid Until: Nov 14, 2024 15:00:00

Support: 2758.37, 2746.24, 2743.16

Resistance: 2790.64, 2800.00, 2840.62

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data