Why Yellow Metal Prices are Plummeting

Exness Market Analysis Team

Gold prices have been steadily declining after failing to surpass the resistance zone at $1,650. The current price is at its lowest point in seven months. Strong economic data from the US has triggered a meltdown in the gold market.

The US dollar has reached new ten-month highs. Core PCE prices, which is the Fed’s key measure of core inflation, rose by 0.1 percent month-over-month in August 2023, the lowest increase since November 2020. 

Despite this, the 10-year treasury yield has reached its highest point in 16 years. This is because real interest rates are still on the rise, which supports the narratives that the Federal Reserve will keep interest rates higher for longer.

The US economy seems to show resilience as GDP growth, published last Thursday, remains constant for the second quarter. Furthermore, in September 2023, the ISM Manufacturing PMI rose to 49, marking the highest reading of the year thus far. 

The yellow metal faced additional pressure as US lawmakers reached a temporary agreement over the last weekend to fund the government for an additional 45 days. Investors are currently awaiting the release of the monthly Non-Farm Payroll data scheduled for Friday. 

On the daily charts, a descending triangle pattern seems to have emerged. Gold prices have successively peaked lower, with each peak being lower than the one preceding it. The psychological support zone of $1,900 was broken on Wednesday with a significant momentum, just before the release of GDP and inflation data. 

The 50% Fibonacci level of the recent wave was unable to hold as well, due to a sustained selling pressure. It is yet to be seen if the bulls can defend the next psychological support level at $1,800.

Read this next

Executive Moves

Montenegro approves Do Kwon’s extradition to US

Do Kwon, the former CEO of cryptocurrency startup Terraform Labs, is reportedly facing extradition to the United States to face fraud charges. Kwon has been imprisoned in Montenegro since March, and Montenegro’s Justice Minister Andrej Milovic is expected to make a formal decision on the extradition on December 20.

Institutional FX

Marex seeks US listing following failed UK IPO, eyes $2.8B valuation

London-headquartered commodities broker Marex has kicked off plans for a US listing, opting against a London public float after a failed attempt two years ago.

Retail FX

ThinkMarkets IPO scrapped as SPAC merger falls through

Canada-listed blank check company, FG Acquisition Corp., and Melbourne-based broker ThinkMarkets have jointly decided to call off their previously announced merger plan.

Retail FX

Exness trading volumes slow down in November, dip below $4B mark

FX brokerage powerhouse Exness reported a double-digit decrease in its trading volumes for the month of November 2023 as the market environment stabilised following a period of high volatility.

Executive Moves

iGaming veteran Breon Corcoran replaces June Felix as IG CEO

Spread betting and CFDs broker IG Group plc today announced the appointment of Breon Corcoran, the former chief executive of Paddy Power Betfair, as its new CEO, effective from January 29, 2024.

Retail FX, Reviews

A Guide to Forex Trading and Quotex App Download for PC

Trading in financial markets presents a great opportunity for profit. One of the popular choices nowadays is foreign exchange trading, also called Forex or FXm which involves buying and selling national currencies to make a profit. 

Digital Assets

Tokensoft and Chainwire Form Partnership to Boost Crypto PR Outreach

Through this partnership, Tokensoft leverages Chainwire’s expansive PR platform, enhancing its global reach within the cryptocurrency community and ensuring coverage for its token distribution, claims, and fundraising campaigns.

Digital Assets

No escape for Binance’s CZ: Court blocks travel before sentencing

A federal judge in Seattle has ruled that Chanpeng Zhao, the former CEO of Binance, is not permitted to return to his home in the United Arab Emirates before his sentencing in the United States, set for February.

Digital Assets

FINMA-regulated digital asset provider Taurus expands into Germany

This expansion follows recent moves by BaFin to accelerate the licensing of crypto custody services, aiming to boost market confidence. Following this, several new licenses were issued, notably to Commerzbank, making it the first full-service financial institution in Germany to receive a crypto custody license.