On Wednesday, December 13th, during the Asian session, spot gold fluctuated narrowly at a low level in the past three weeks, currently trading at $1978.39 per ounce, a decrease of approximately 0.05%.
On Tuesday, gold prices attempted to counterattack, rebounding around $1997 per ounce before seller control following the release of US CPI data. At first glance, the CPI data may seem positive, but the rise in monthly inflation data means that the Federal Reserve is unlikely to commit to a rate cut at Wednesday's meeting. The US dollar index stabilized and rebounded, pushing gold prices down to the key support area of $1977-1984.
Due to ongoing geopolitical tensions, gold prices will continue to be supported and attract buyers in the event of a significant decline. Currently, gold still has high investment appeal, and with the Fed's interest rate cut in 2024 becoming a certainty, gold may still remain above $1800 per ounce in the future.
On Thursday, December 14th, Beijing time, the Federal Reserve will announce its interest rate decision, and Federal Reserve Chairman Powell will attend a press conference at 03:30. Investors are focused on predicting the future economy, and the difference between predictions and current market expectations is crucial for investment. Federal Reserve Chairman Powell will respond to economic forecast data, and his comments will have a significant impact on capital markets. It is expected that regardless of the economic forecast, Powell will make some form of counterattack against the recent market's expectation of interest rate cuts.
The future trend of gold price depends on the reaction of US dollar and US treasury bond bond yields to the Federal Reserve's interest rate meeting. Any significant deviation between market participants and the Federal Reserve will affect the subsequent price trends. If the Federal Reserve's decision and subsequent important statements lean towards hawkishness, it may provide support for the US dollar and push gold towards the support zone of $1950 per ounce. If the Federal Reserve warms up and implies a rate cut in 2024, gold bulls will regain their vitality and push gold prices above $2000 per ounce. In summary, while the market is holding its breath, the US dollar remains crucial.
From a technical perspective, prior to the Federal Reserve's interest rate meeting, gold was in a critical support zone of $1977-1984. The area has been transitioning between support and resistance levels recently. The daily candlestick pattern of gold has been poor in the past two days, but it did not hit a new low on Tuesday, indicating that the buying pressure on gold is still significant.
There are multiple supports for gold prices above the psychological threshold of $1950. The 50 day moving average is located near the support area of $1968, and the 200 day moving average is above $1950. Under this, both $1940 and $1930 provided some support, and if Wednesday's selling pressure is significant, these supports will come into play.
Whether the price of gold can continue to rise and return to its recent historical high depends on whether it can be recognized above the $2000/ounce mark.
Key points to focus on:
Resistance level: 2000.00, 2007.00, 2025.00
Support position: 1968.001950.001941.00
