We are seeing a continuation of the downward trend in the precious metals market today, with gold (GOLD) settling nearly 1% below $2,600 per ounce today. The declines are directly attributable to the strengthening of the dollar, with the USDIDX index rising above 106 today, and yields, with 10-years treasuries gaining today more than 12 basis points, rising to 4.45% level. The declines in gold are due to the prolonged 'Trump Trade'. The Republicans' and Trump's agenda is likely to put more pressure on the Fed with higher Fed rates in 2025.
- Recent data including the NY Fed survey from today suggest an improving outlook around the health of the US economy and consumers. Another aspect to geopolitics, where, at least in the short term, investors see more encouraging circumstances, suggesting a decrease in tensions in the Middle East or between Washington and Beijing, among others.
- Also, a return to peace talks between Ukraine and Russia, at the turn of the year or early 2025, is not out of the question. Geopolitics, however, is the broader backdrop for the gold market, not a factor in today's sell-off. Palladium (PALLADIUM) is also losing more than 4% today; a pullback is seen in silver (SILVER).
GOLD (H1 interval)
Looking at the hourly chart, we see that gold has broken out of the upward price channel at the bottom and is testing levels from the second half of September.
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Gold is one step closer to test a lower band of the medium-term price channel at 2580 USD per ounce; RSI signals close to oversold conditions near 38, however EMA200 is still much lower, now at $2440.
Source: xStation5
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