Gold prices have been under a lot of pressure lately. They dropped below $2,600 per ounce because there weren’t any new updates on China’s economy, and some strong data from the U.S. worried investors. However, gold did bounce back a bit at the end of the week, closing at $2,624 on Friday, with a slight 1.13% gain on that day. Despite this, gold ended the week nearly 1% lower. During the week, its price fluctuated between $2,583 and $2,693.
Gold got a bit of a boost after the U.S. released its PCE Price Index for November, an important measure of inflation. The numbers were slightly better than expected, showing a slower rise in prices. Here’s the breakdown:
– Monthly PCE: 0.1% (Forecast: 0.2%)
– Yearly PCE: 2.4% (Forecast: 2.5%)
– Core PCE (Monthly): 0.1% (Forecast: 0.2%)
– Core PCE (Yearly): 2.8% (Forecast: 2.9%)
These numbers are significant because they affect how the Federal Reserve (Fed) decides on interest rates. In a meeting on November 18, the Fed lowered the Fed Fund rate by 0.25%, bringing it to a range of 4.25% to 4.50%. However, they also suggested they might keep rates higher for a while, which had some members concerned.
Other countries’ central banks, like the Bank of England and the Bank of Japan, decided not to make big changes, which helped support the U.S. dollar.
Looking ahead, important U.S. reports coming up include Consumer Confidence for December and how many durable goods were ordered in November. There’s also the final report on U.K. GDP for the third quarter that traders will watch closely.
Total global gold holdings in ETFs dropped to 82.647 million ounces, marking a third week of declines.
Due to the Fed’s decisions and strong U.S. economic news, the U.S. dollar index rose slightly but settled lower than its peak. Yields on U.S. government bonds also saw a rise.
In conclusion, even though the PCE numbers gave gold a temporary boost, other strong U.S. data means the Fed might keep interest rates high. Traders may be cautious, especially since trading could be quieter with the holiday season coming. For gold, there’s tough resistance around $2,670, while support levels are at $2,606 and $2,580. Overall, gold might still face difficulties pushing higher in the near term, and a dip to $2,536 is also possible.
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