gold prices have plunged to their lowest point in two months, hovering around $2,560 as traders await the upcoming speech from US Federal Reserve Chair Jerome Powell. The price of gold has now recorded five consecutive days of declines, pressured by sustained demand for the US Dollar and rising Treasury bond yields. This trend has been fueled by optimism surrounding investment related to former President Donald Trump, overshadowing the release of US inflation data that met expectations.
In October, the US Consumer Price Index (CPI) saw an annual increase of 2.6%, a slight rise from the previous month’s 2.4% growth, while core CPI inflation held steady at 3.3%, in line with forecasts. Despite this, Federal Reserve officials have expressed caution about the inflation outlook, indicating that the central bank may adopt a measured approach in the months to come. Market expectations now suggest an 83% chance of a 25 basis point interest rate cut in December, reflecting a notable increase from earlier predictions.
The optimistic sentiment surrounding the US Dollar, driven by Trump-related trading, has overshadowed anticipated dovish actions from the Fed. As a result, gold buyers are struggling to gain momentum. All eyes are on Jerome Powell’s address, which is expected to address global economic dynamics and could offer insights into potential easing measures amid concerns regarding inflationary policies that may emerge from Trump’s administration.
In terms of technical indicators, gold has fallen below the crucial $2,600 level, opening the door for further declines. The 14-day Relative Strength Index (RSI) indicates a bearish trend, approaching oversold conditions. Immediate support is at the 100-day Simple Moving Average (SMA) and the September 18 low near $2,545. A break below this level could lead the price to further drop towards the significant $2,500 support, with additional bearish targets set at the September 4 low of $2,472. Conversely, if the price rebounds, the $2,600 level will serve as a key resistance point for bullish prospects.
