Fed's Dovish Outlook Bolsters Gold's Continued Rally

Deep News12-15 20:10

On December 15, last Friday's analysis suggested that market expectations of further Fed rate cuts in 2024 would support gold prices. Technically, gold had broken upward from a two-week consolidation range, indicating potential for further gains. Key support levels were identified at $4,300 and $4,285, with resistance at the all-time high of $4,381.

Subsequent price action saw gold extend its rally during the European session, peaking at $4,339 before pulling back. After the U.S. market opened, prices surged to a one-month high of $4,353 before a sharp drop to $4,257. However, gold quickly rebounded, stabilizing above $4,285 and resuming its upward trajectory on Monday, reaching $4,350. Currently trading near $4,342, gold has maintained its bullish momentum, aligning with earlier projections.

Analyst Huang Lichen from Wolfinance noted that gold has risen for five consecutive sessions, approaching its record high of $4,381. The rally stems from the Fed's recent 25-basis-point rate cut and Chair Powell's remarks highlighting labor market risks, which fueled speculation of two additional cuts in 2024. This dovish outlook has pressured the dollar to a two-month low. Diverging Fed votes and geopolitical uncertainties have further driven safe-haven demand, underpinning gold's strength.

On the daily chart, gold's breakout from its consolidation phase signals accelerating upward momentum. Immediate support lies at $4,330 (Asian session breakout level), followed by $4,300, where early dips found buyers. Resistance is eyed at $4,353 (Friday’s peak), with a break above potentially targeting $4,381. Technical indicators (5-day MA, MACD, RSI, and KDJ) all point to sustained upside potential post-consolidation.

Trading Strategy: Fed easing expectations continue to buoy gold near record highs. Approach with a range-trading mindset—support at $4,330, with $4,300 as a secondary level holding bullish potential. A breakout above $4,353 could retest $4,381.

Disclaimer: Market conditions may change rapidly; investors should assess risks independently.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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