24K99 News Friday (November 4) In the European market on Friday (November 4), affected by the sharp drop in the U.S. dollar, spot gold maintained a strong trend. The gold price is now reported at around $1,648 an ounce, up nearly $20 in the day. Dhwani Mehta, an analyst on the well-known financial website FXStreet, recently wrote an analysis of the technical prospects of gold prices.
Gold prices recovered further from a two-month low of $1,617 an ounce, Mehta wrote; the dollar index rose from a 9-day high of 113.15 as investors took profits on dollar bulls ahead of key U.S. nonfarm payrolls data fall back.
The U.S. dollar index was near 112.55 in the European market, down about 45 points in the day.
At 20:30 Hong Kong time on Friday, the US non-farm payrolls report for October will be released. Authoritative media surveys show that non-farm payrolls in the United States are expected to increase by 200,000 in October, after an increase of 263,000 jobs in September.
Mehta pointed out that a weaker-than-expected U.S. non-farm payrolls data could suggest the Federal Reserve will raise interest rates slightly in the coming months, as weak jobs data will rekindle fears of an economic slowdown. In this case, gold prices may extend the rally.
The Federal Reserve announced a 75 basis point increase in the federal funds rate at local time.
With clear signs of an economic slowdown, Fed officials said, the central bank will soon raise rates in smaller increments, such as 25 basis points or 50 basis points.
Gold latest technical analysis
Mehta pointed out that from the daily chart, gold prices are showing a descending triangle pattern after peaking near $1,730 an ounce in early October. Gold bulls continue to find support near $1,616 an ounce, a level that is difficult for bears to overcome.
However, with the 14-day RSI remaining below the 50.00 level, downside risks to gold prices remain unless the gold day closes above key resistance around $1,650 an ounce. This area is the confluence of the bearish 21-day moving average and the triangular downtrend line resistance.
(Source of spot gold daily chart: FXStreet)
Mehta said that if gold prices close above $1,650 an ounce on a daily basis, this would confirm a triangle breakout, start a new uptrend, and head towards the $1,700 an ounce mark.
Still, gold bulls still need to break above the 50-day moving average of $1,674 an ounce and the Oct. 13 high of $1,683 a troy ounce amid the aforementioned rally.
On the other hand, Mehta pointed out that if the price of gold fails to overcome the key resistance level near $1,650 an ounce, then gold will resume its downtrend and a retest of two-month lows will be inevitable. The next important downside target is the $1,600/oz mark.
At 16:38 Hong Kong time, spot gold was quoted at $1,648.40 per ounce.
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