Market Has Begun to Shift Towards a Bullish Trend

Commodity

Economic

Summary:

Gold prices remain stable around the US$2,650 threshold, influenced by a combination of geopolitical tensions, the U.S.' easing of interest rate policies, and significant gold purchases by central banks.

BUY XAUUSD

Close Time

CLOSED

2657.20

Entry Price

2706.00

2620.00

4599.72 +2.55 +0.06%

397.8

Pips

Profit

2620.00

2696.98

Exit Price

2657.20

Entry Price

2706.00

Fundamentals

On Monday, gold prices in the European market continued to trend upward, yet remained below the strong resistance level of US$2,660 - US$2,665, oscillating within a familiar range over the past two weeks. The U.S. non-farm payrolls released last Friday painted a complex economic landscape, significantly impacting the gold market, monetary policy, and investor strategies.

The U.S. Bureau of Labor Statistics revealed that the economy added 227,000 new jobs last month, surpassing market expectations of 214,000, and showing a notable improvement from the previous month's addition of 36,000 jobs.

However, this robust employment data coincided with a slight increase in the unemployment rate, which rose from 4.1% to 4.2%, indicating subtle disparities in the labor market environment.

The mixed employment report initially favored the U.S. dollar, but the uptick in the unemployment rate reaffirmed expectations that the Federal Reserve will lower borrowing costs in December; consequently, the precious metals market responded with a measured approach.

As time progresses, influenced by geopolitical risks and central bank purchases, gold prices have once again risen this Monday. This follows the occupation of Damascus by Syrian opposition forces, which has heightened demand for safe-haven assets.

Additionally, after a six-month hiatus, the People's Bank of China (PBOC) resumed its gold purchases for reserves in November. This move is likely to further elevate gold prices, given China's status as a major consumer of gold. By the end of November, China's gold holdings increased from 72.8 million troy ounces a month prior to 72.96 million troy ounces.

Gold prices are projected to reach historic highs in 2024, reflecting the combined effects of geopolitical tensions, the easing of interest rate policies in the U.S., and significant central bank acquisitions of gold.

Market Has Begun to Shift Towards a Bullish Trend_1

Technical Analysis

Since last Friday, gold prices have remained in a significant range-bound trading pattern, showing no clear direction. However, as time progresses and smaller ranges are breached, the market appears to be beginning to make a decision.

The lower range is defined by the time period starting last Monday. Since then, gold prices have not surpassed the US$2,660 threshold, establishing a foundation for a potential decline. Currently, gold prices have slightly exceeded last week's high of US$2,657, signaling an early indication of a bullish market.

Technically, the next resistance level is the supply zone between US$2,659 and US$2,666. A breakout above this range, accompanied by subsequent buying activity, would be viewed as a critical trigger for bullish sentiment, potentially allowing gold prices to recover the key psychological level of US$2,700. This momentum could further extend towards the next relevant level around US$2,722.

Conversely, a drop below the immediate support level of US$2,630 could pull gold prices back into the US$2,620 - US$2,613 range.

Trading Recommendations

Trading Direction: Buy

Entry Price: 2652

Target Price: 2706

Stop Loss: 2620

Valid until: December 24, 2024 23:55:00

Support: 2651, 2634, 2627

Resistance: 2659, 2666, 2672

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