In the Asian trading session on Wednesday afternoon, the spot gold price suddenly accelerated its ascent, briefly touching $4,639.55 per ounce to set a new all-time high, marking an intraday surge of $52. FXStreet Chief Analyst Valeria Bednarik authored an analysis on gold's technical outlook. Bednarik stated that gold has initiated a fresh round of record-breaking gains, with market risk sentiment potentially driving prices even higher. The United States is scheduled to release its November Retail Sales data on Wednesday, which represents another significant piece of data that could influence demand for the US dollar.
Analysts pointed out that the strong upward momentum in gold is fueled by traders betting on US interest rate cuts following the release of US inflation data. Traders will focus on US Retail Sales and Producer Price Index (PPI) data later on Wednesday for further clues. Data released on Tuesday showed that the US core Consumer Price Index (CPI) for December rose 0.2% month-over-month and 2.6% year-over-year, both figures coming in below analyst expectations of 0.3% and 2.7%, respectively. Regarding the geopolitical situation, the US President announced the imposition of a 25% tariff on countries engaging in trade with Iran. The new tariffs took effect immediately and apply to "all" trade between these nations and the United States. Security forces in Iran have suppressed large-scale demonstrations, with reports indicating hundreds of fatalities. Furthermore, the outlook for the Federal Reserve is clouded with uncertainty due to renewed threats from the administration.
FXStreet analyst Lallalit Srijandorn noted that on Wednesday, US Retail Sales and PPI data would be the focal point for markets. These reports could provide some clues regarding the trajectory of US interest rates. Any signs of rising US inflation could potentially boost the US dollar in the short term and exert pressure on dollar-denominated gold prices. Bednarik indicated that the 4-hour chart for gold shows a maintained bullish tone. The 20-period Simple Moving Average (SMA) is positioned above both the 100-period and 200-period SMAs, with all three averages sloping upwards; additionally, the gold price is trading above all these moving averages, highlighting a strong bullish bias. The 20-period SMA, currently situated around $4,548.34 per ounce, provides dynamic short-term support.
Bednarik added that on the daily chart, the gold price has recorded gains for four consecutive trading sessions. The 20-day SMA continues to advance above the 100-day and 200-day SMAs, further solidifying the bullish structure. All three moving averages are in an uptrend, and the gold price remains above them, with the shorter-term average near $4,424 per ounce constituting a significant support line. Finally, technical indicators have only retreated slightly from extreme overbought conditions, falling far short of signaling that the bull run has concluded.
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