GOLD Analysis
Afternoon: Gold Nears $2,650 as FOMC Minutes and Key US Data Shape Monetary Policy Outlook
Highlights:
- Gold nears $2,650 as FOMC minutes highlight cautious rate cut stance, boosting non-yielding asset appeal.
- US data on GDP, PCE inflation, and jobless claims to shape short-term monetary policy outlook.
- Reduced geopolitical risks and weaker Chinese gold imports cap further upside for gold prices
Overview:
Gold prices edged closer to $2,650 per ounce as investors analyzed the Federal Open Market Committee (FOMC) meeting minutes and awaited key US economic data. The FOMC minutes highlighted the Federal Reserve's confidence in moderating inflation and a robust labor market, while emphasizing caution in future monetary policy adjustments. Market participants interpreted this as signaling a gradual approach to rate cuts, which could favor gold as a non-yielding asset.
The probability of a 25 basis point rate cut in December remains steady at around 63%, enhancing gold's appeal by reducing the opportunity cost of holding non-interest-bearing assets. However, the strengthening US dollar and reduced geopolitical risks limited gold's upside potential. Additionally, a notable drop in China’s gold imports via Hong Kong, down 43% year-on-year in October, indicated weaker physical demand.
Economic Data to Watch
Investors await key US economic indicators, including:
- Initial Jobless Claims: Insights into labor market health.
- GDP Second Estimates: Updates on economic growth.
- Core PCE Price Index: Fed’s preferred inflation gauge.
- Durable Goods Orders: Indicators of economic activity.
Action Plan:
Buy gold near $2,645-50 with a target of $2,665/2720, placing a stop-loss below $2,620.
Support and Resistance Levels:
