GOLD | Breaks Out as Yields Sink, Fed Pivot Hopes Build

2023년 11월 17일

XAUUSD PRICES OUTLOOK
- Gold prices rally and break above technical resistance in the $1,975/$1,980 area
- Bullion’s gains are driven by a steep pullback in Treasury yields following disappointing economic data
- This article examines key XAUUSD’s levels worth watching in the coming trading sessions

Gold prices rose over 1.0% on Thursday due to a decrease in U.S. Treasury yields following disappointing labor market data. Unemployment benefit applications for the week ending November 11 exceeded expectations, while continuing jobless claims reached their highest level in almost two years, indicating challenges in finding employment for Americans.

The recent economic indicators, along with the CPI and PPI figures, suggest that the Federal Reserve's tightening cycle is ending and rate cuts may be on the horizon. This has led to lower yields and a potential increase in gold prices if the US dollar continues to weaken. Further economic weakness could prompt a shift in Fed policy.

XAUUSD PRICE TECHNICAL ANALYSIS

Gold prices, measured through futures contracts, took off on Thursday, breaching a key technical ceiling stretching from $1,975 to $1,980. If this breakout is sustained, prices could start consolidating to the upside in the coming days, paving the way for a move toward $2,010/$2,015. Additional gains from here on out might embolden the bullish camp to launch an attack on $2,060.

In the event of a bearish reversal, the first line of defense against a downturn is located in the $1,980-$1,975 zone. Although bullion may establish a base in this region on a pullback, a breakdown could trigger a deeper retracement, opening the door for a drop towards cluster support in the $1,950/$1,940 range (several key moving averages converge in this area). Below this floor, the focus shifts to $1,920.