Gold markets are under prolonged pressure with a sixth consecutive day of losses. The price of an ounce slips below the bar 2 570 $marking a weekly fall of more than 4%. This decline, the largest since September 2023, is largely linked to cautious statements from the Chairman of the American Federal Reserve, Jerome Powell.
A Fed cautious about falling rates
During his speech last Thursday, Jerome Powell stressed that the central bank will not rush to reduce borrowing costs. Despite generally positive US economic indicators, Powell believes that the inflationary pressure remains too high, well beyond the 2% target.
Investors, initially optimistic about a rate cut in December, adjusted their forecasts. The probability of a 25 basis point monetary easing has increased from 72% to 62%a change that strengthened the dollar while weighing on the gold market.
Contrasted economic data
Despite a favorable economic climate, the results do not dispel all the uncertainties. Retail sales in the United States increased by 0,4 % in October, slightly above forecasts. However, this increase remains lower than the 0.8% jump recorded in September.
Also read: Gold falls again this week but is it still a good financial investment?
On the industrial production side, a contraction of 0,3 % was observed, in line with expectations, but an improvement compared to the previous drop in 0,5 %. These elements, although mixed, were not enough to recover the prices of the precious metal, which had reached a two-month low in 2 536 $.
A strong dollar and stable bond yields
The US dollar index (DXY), which measures the performance of the greenback against a basket of six currencies, remained at 106,76recording a slight decrease of 0.10%. Meanwhile, yields on 10-year Treasury bonds remained almost unchanged at 4,43 %.
This combination of factors limits gold's prospects for a rebound, as investors take profits at the end of the week.
Statements from other Fed members
In Boston, Susan Collins confirmed that the Fed was in no hurry to cut rates. As for Austan Goolsbee, representative of Chicago, he spoke of the continued uncertainty surrounding the neutral rateleaving the door open for careful decisions at the next meeting in December.
A decisive week ahead for the gold markets
Investors will be closely watching upcoming economic data, including housing numbers, initial jobless claims and flash PMIs from S&P Global. These indicators could influence gold market movements and clarify the Fed's intentions for the months to come.
Technical analysis: crucial resistance thresholds
On a technical level, the price of gold remains under pressure. After briefly touching 2 536 $just below the 100-day simple moving average (SMA) set at 2 545 $a moderate rebound is possible. The first resistance threshold is located at 2 600 $followed by the 50-day moving average at 2 651 $. A break beyond 2 700 $ could pave the way towards the November peak at 2 710 $.
However, the Relative Strength Indicator (RSI) signals bearish momentum, suggesting risks of further declines towards 2 550 $.
FAQ: Why does gold remain a key investment?
What is the point of investing in gold?
Gold, in addition to its applications in jewelry, is often perceived as a safe haven. In times of economic uncertainty, it serves as hedge against inflation and currency fluctuations.
Who are the main buyers of gold?
Central banks hold the largest gold reserves, particularly in emerging economies such as China, India and Turkey. In 2022, they added 1,136 tonnes to their stocks, a historic record.
How does gold interact with other assets?
Gold often moves in the opposite direction American dollar and Treasury bonds. When the dollar weakens, the yellow metal tends to strengthen, providing welcome diversification in times of crisis.
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