{"id":95492,"date":"2024-11-26T14:44:27","date_gmt":"2024-11-26T12:44:27","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=95492"},"modified":"2024-11-26T14:44:29","modified_gmt":"2024-11-26T12:44:29","slug":"gold-outlook-golds-upward-movement-interrupted","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/vi\/gold-outlook-golds-upward-movement-interrupted\/","title":{"rendered":"Gold Outlook: Gold\u2019s upward movement interrupted"},"content":{"rendered":"

Compare to last report<\/a> , Gold\u2019s price corrected heavily lower on Monday relenting most of last week\u2019s gains. In today\u2019s report we intend to have a look at the interruption of the negative correlation of the USD with gold\u2019s price, geopolitical issues, Trump\u2019s intentions and the release of the Fed\u2019s November meeting minutes, all on a fundamental level for the gold market. For a rounder view, we conclude the report with a technical analysis of gold\u2019s daily chart.<\/p>\n\n\n\n

The negative correlation of gold with the USD interrupted<\/strong><\/h2>\n\n\n\n

The negative correlation of gold with the USD, seems to have been interrupted over the past week. It\u2019s characteristic that the USD rose over the past week, similar to the rise of gold\u2019s price, while gold\u2019s price since yesterday has been falling, while the USD Index remains relatively static. <\/p>\n\n\n\n

The movements of the two trading instruments if contrasted imply a de facto interruption on the negative correlation of the two trading instruments which may be continued in the coming week. Such an interruption could be implying that fundamentals leading gold\u2019s price, are elsewhere. <\/p>\n\n\n\n

Another interesting factor to watch out for would be the path of US bond yields. In the past week, US yields tended to be in the rise, on Monday dived lower and their movement thus also implies that any negative correlation with the path of gold\u2019s price was interrupted.\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n\n\n\n

Trump\u2019s intentions for tariffs could<\/strong><\/h2>\n\n\n\n

Trump\u2019s pick for the Treasury Secretary, Scott Bessent, 62, hedge fund manager, may have been the main headline over Trump\u2019s picks in his new Government, in the past week. The nominee seems to be a more mainstream choice, less controversial and Wall Street likes him. He is considered a good ally in Trump\u2019s ideas for further deregulation of the markets and easing corporate taxation, yet it\u2019s also going to be interesting to see his potential influence in Trump\u2019s intentions to slap tariffs on US imports. <\/p>\n\n\n\n

We note that Bessent was reported to be a supporter of a stronger USD, thus in turn may prove to be also a supporter for tariffs on US imports. Overall we see the case for the pick of Bessent to ease the markets\u2019 worries for Trump\u2019s economic policies, thus could create some safe haven outflows for the precious metal. <\/p>\n\n\n\n

On the other hand, the announcement by Trump that on the first day in office we will be applying 25% tariffs on imports from Mexico and Canada and charging also additional 10% tariffs on imports from China could renew market worries and thus support gold\u2019s price. We may see Trump\u2019s tariff threats having a wider effect on the markets in the coming days.\u00a0<\/p>\n\n\n\n

Easing geopolitical tensions may weigh on gold\u2019s price<\/strong><\/strong> \u00a0<\/strong> <\/h2>\n\n\n\n

The possibility of a ceasefire between Israel and Hezbollah, in Southern Lebanon, may have contributed further to the weakening of gold\u2019s price yesterday. It\u2019s characteristic that media mentioned the possibility off the US and France announcing a ceasefire deal as White House national security spokesperson John Kirby said, “We’re close” but “nothing is done until everything is done”, while the French Presidency stated that discussions on a ceasefire had made significant progress. <\/p>\n\n\n\n

Yet it remains to be seen whether the two main parties are to accept such aa ceasefire deal. We tend to view Hezbollah may be near to such a deal, yet we still maintain worries for Israel. The Israeli far right may consider such a deal as a retreat and thus apply substantial pressure on Israeli Prime Minister Netanyahu to reject it. On the flip side Netanyahu is getting pressure to accept the deal especially from the US. <\/p>\n\n\n\n

Should a ceasefire deal be achieved, we expect further safe haven outflows to weigh on gold\u2019s price and vice versa, should the effort for ceasefire deal fail, we may see increased support for gold.<\/p>\n\n\n\n

The release of the Fed\u2019s November meeting minutes<\/strong><\/h2>\n\n\n\n

Despite the interruption of the negative correlation between the USD and gold, we still note the release of the Fed\u2019s November meeting minutes later today as a possibly disruptive event under certain circumstances. It should be noted that the release of the Fed\u2019s past meeting minutes created little buzz among market participants as they did not offer anything substantially new. <\/p>\n\n\n\n

Yet we do see a shift in Fed policymakers\u2019 stance as worries for the inflationary effect of Trump\u2019s proposed policies could alter the bank\u2019s rate cutting direction. Should the comments made by Fed policymakers enhance market expectations for the bank to pause or further ease its rate cutting path, the release could weigh on gold\u2019s price.\u00a0<\/p>\n\n\n\n

Gold Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD 4H Chart<\/strong><\/strong><\/h3>\n\n\n\n
\"Chart<\/figure>\n\n\n\n