Gold price is edging lower near the $2,020 area mostly due to the rebound of the US Dollar and strong US Services PMI flash data. The Federal Reserve (Fed) has left interest rates unchanged and emphasized its goal to lower inflation. Economic data, such as the preliminary US Building Permits and Housing Starts for November, will probably help determine future interest rate cuts. The US S&P Global Manufacturing PMI flash data for December fell to its lowest level in four months, while the Services PMI exceeded expectations from 50.6 to 51.3 points. The market anticipates a rate cut between 75 - 125 basis points (bps) next year according to the Fedwatch tool starting at the March meeting. The upcoming US personal consumption expenditures report and GDP Annualized for Q3 will provide further direction for the gold price.
From the technical point of view gold price is currently testing the support area of the 78.6% of the weekly Fibonacci retracement level without being able to break below it in the last 3 sessions. The Stochastic oscillator is not recording any overbought or oversold conditions while the 50 day moving average is trading above the 100 day moving average indicating that the overall bullish momentum is still valid.
All in all the area between the $1,960 - $1,970 is a dynamic support area between the 2 moving averages making it a strong technical support level.
From the technical point of view gold price is currently testing the support area of the 78.6% of the weekly Fibonacci retracement level without being able to break below it in the last 3 sessions. The Stochastic oscillator is not recording any overbought or oversold conditions while the 50 day moving average is trading above the 100 day moving average indicating that the overall bullish momentum is still valid.
All in all the area between the $1,960 - $1,970 is a dynamic support area between the 2 moving averages making it a strong technical support level.