#XAUUSD #Gold Price Analysis Today: Gold Attempts to Hold $2,000 Peak(Gold Falls from Record High by $100 in 1 Day) (5 Dec 2023)

Gold Attempts to Hold $2,000 Peak

In the midst of a stunning performance by markets and investors, a price gap occurred for gold, breaking all expectations to break the pandemic-era gold record level. According to trading, the price of gold XAU/USD jumped to the resistance level of $2,145 per ounce, the highest in the history of gold prices. However, it soon faced a wave of profit-taking and later retreated. Moreover, the factors that strengthen gold are still in place and increasing, and selling will remain opportunities for buying.

Factors behind the latest increase in gold prices and the anticipated upward trend in the upcoming days

With the global economy losing steam and inflation slowing, bond yields have fallen sharply. As, markets offered the expected timing for US interest rate cuts, which in turn served as rocket fuel for gold prices. On the other hand, geopolitical demand was another driving force behind this sharp rise. Thus, the tensions in the Middle East fueled demand for gold as a hedging tool, while direct purchases from China. Also, other central banks to diversify their reserves amid the “new cold war” climate also played a decisive role in raising prices this year.

Meanwhile, the fact that the breakout at the beginning of the week occurred in a weak liquidity environment during early Asian trading further complicates matters and may explain why gold fell again so quickly. However, the broader outlook for gold looks favorable going into next year, as the global economy faces a mild recession and central banks expect to cut interest rates significantly to soften the blow.

Recently, the price of gold rose to a new all-time high as growing expectations for a cut in US interest rates early next year stimulated a buying wave. Overall, the latest phase of gold's rally was stimulated by comments issued on Friday from Federal Reserve Chairman Jerome Powell, which traders interpreted as paving the way for a pivot towards lower US interest rates, which in turn led to a decline in the price of the dollar and Treasury yields.

Gold Price Forecast and Analysis Today:

Our technical view of the gold price XAU/USD remains unchanged. As the overall trend is still up the psychological resistance of $2,000 per ounce will remain an important catalyst for further bullish control. Moreover, 0If the pressure on the US dollar and Treasury yields continues this week after the release of important US employment numbers. Thus, the gold price could move towards new record highs, the closest of which are currently $2,065, $2,120, and $2,170, respectively. On the other hand, and over the same period, expectations of gold's rise will be negatively affected by a return to the movement towards the support level of $1,985 per ounce.

Gold Falls from Record High by $100 in 1 Day

The record high of about USD 2,130 an ounce was set just after the weekend in low-liquid Asian markets. By the nature of the movement, it looked more like a cascading triggering of sellers’ stop losses, rather than finding a stable balance between supply and demand, since after the candle with a long upper tail, the quote began to fall. During the European session it fell to 2,060, and during the American session it fell to 2,030. So in less than a day, the price of gold fell about USD 100, making Monday’s close further from the record top than Friday’s close — essentially similar to a change in market sentiment, in which a bearish engulfing pattern is formed.

From a fundamental point of view, the gold market is influenced by:

→ Jerome Powell’s words that expectations of a rate cut may be “premature”;

→ positioning traders at the beginning of the working week. Important news on the US labor market is expected on Friday.

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