Update: The price of gold stagnated at the beginning of the week, which may encourage bulls to take profits in order to test previous resistance levels on the daily chart. At the time of writing, gold has fallen more than 0.20% and has so far fallen to a low of $1,860.99. $1,860 is a key level on the hourly chart:
The break of horizontal support will expose the dynamic trend line, and then the prospect of entering the 1,830 enhancement zone will become possible.
Last Friday, the U.S. dollar exchange rate against the G10 was mixed. Following the US inflation report last week, gold recorded its biggest weekly gain in more than six months. Due to consumer concerns, the U.S. dollar fell from a high of 95.265, and gold/dollar rose to 1,868 U.S. dollars. As consumers were concerned about rising prices, the University of Michigan's consumer confidence survey in November unexpectedly fell to a 10-year low.
The specter of deep-rooted inflation has caused a surge in investor demand. As the global market seeks to hedge against inflation, the yellow breakthrough has also attracted new buyers. In the foreseeable future, this sentiment may continue. The US Bureau of Labor Statistics announced that US consumer prices have risen by 6.2% in the past year. However, this is not a phenomenon unique to the United States. Eurostat, the European statistical agency Eurostat, has released a preliminary estimate of annual inflation in the Eurozone. Like the US report, this estimate shows that inflation is above normal. The preliminary estimate based on incomplete data is 4.1%, which is much lower than the US level. In fact, the four largest economies in the world—the United States (highest in 30 years), China, Japan (highest in more than 40 years), and Germany—all reported inflation figures for October. Economists, politicians, and central bank leaders have always insisted that the current inflation is temporary, but the market does not seem to think so. This is bullish for gold.
We have begun to see policymakers abandon the short-lived mantra, but there is still a lot of work to be done in terms of workforce recovery, so it is necessary to maintain a good balance of communication in the recovery of past pandemics. However, some economists are more concerned. For example, Mohamed El-Erian, chief economic adviser to Allianz SE, stated that this will be one of the worst inflation calls ever made by the Fed in history. He believes that inflation will not fall back soon. What is worrying is that the time between the end of the reduction and the interest rate hike will not be long, and they will have to raise interest rates faster and seize the opportunity time in the wrong place. In this regard, the bond market and US yields will have an impact on gold prices in the coming week.
The above link is an inverse view of the current price trend, and a healthy bearish correction is expected.
In this daily chart, it indicates that the price is reaching a critical resistance level and is expected to pull back to the previous daily high. A 38.2% Fibonacci retracement can be found near $1,830.
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