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Gold – Narrow Path to Rebound Appears Less and Less Likely

BySatendra Singh
Published 11/12/2024, 03:08 PM
XAU/USD
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GC
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Since my latest article, gold futures have come down sharply with the Fed’s rate cut and Donald Trump’s come back.

There is no doubt that the growing expectation over Trump’s protectionist stance towards trade and immigration could result in higher inflation. The announcement of consumer price index data this week is also expected to show inflation remaining sticky in October.

On the other hand, the US dollar index has raced to a four-month high this week, which is inflationary. Amid such a scenario, technical indicators look quite supportive of a long-term bearish trend in gold prices.

In the daily chart, the 9 DMA has tilted downward and has formed a bearish crossover by crossing below the 18 DMA while the gold futures are currently trading below this bearish formation.

Secondly, the gold futures have broken the lower trend line of the uptrend channel, confirming a step-down could lead to a steep fall in gold prices.

Thirdly, gold futures continue to fall 60 degrees from the peak, which is likely to continue after one more down step by the gold futures, which could lead this fall to test the next support at $2551.

Finally, I conclude that the gold futures have already broken the significant support at $2683, which has now turned into a major resistance for the gold futures.

Undoubtedly any bounce in the short term could provide an opportunity to short the gold December futures.

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