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MTrading Team • 2023-11-27

Gold rises to six-month high on sluggish Monday

Gold rises to six-month high on sluggish Monday

Jittery markets allow the Gold buyers to refresh a multi-week high amid a three-day uptrend on early Monday. Among the key catalysts, the broad US Dollar weakness, a pullback in the Treasury bond yields and mixed concerns about China played major roles.

That said, China's readiness for more stimulus and mixed prints of Industrial Profits join Friday’s unimpressive prints of the US PMIs for November to propel the XAUUSD, as well as help the riskier currencies. It’s worth noting, however, that Crude Oil remains pressured on demand fears, as well as due to OPEC concerns.

Elsewhere, USDJPY posts the biggest gains versus the US Dollar among the G10 currency pairs while Antipodeans hesitate in cheering the Greenback’s weakness ahead of the key week. Further, GBPUSD also struggles to remain firmer even as BoE’s Bailey flags inflation woes.

BTCUSD and ETHUSD extend the previous day’s pullback as industry signals struggle to defend the optimism about the Spot ETF approvals.

Following are the latest moves of the key assets:

  • Brent oil drops back to $80.00, reversing the previous day’s corrective bounce from a one-week low.
  • Gold price prints three-day uptrend near $2,010 after refreshing a six-month high earlier in the day.
  • USD Index remains pressured at three-month low marked the last week, mildly offered near 103.30 at the latest.
  • Wall Street closed mixed on Friday while Asia-Pacific stocks edged lower. Further, equities in Europe and the UK begin the day with mild losses.
  • BTCUSD and ETHUSD both print minor losses to around $37,300 and $2,050 at the latest.
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Dicey markets direct bulls toward Gold amid softer US Dollar

US Dollar Index (DXY) prods the multi-month low marked last week as yields retreat while the Asia-Pacific shares edge lower and the S&P 500 Futures print mild losses. In doing so, the DXY bears the burden of the recently downbeat US data that flag concerns about the Fed’s policy pivot.

Previously, preliminary readings of the US S&P Global PMIs for November failed to impress the US Dollar bulls as the Manufacutring PMI eased to 49.4 versus 49.9 expected and 50.0 prior. It should be noted, however, that the Services PMI improved to 50.8 from a downwardly revised 50.6 previous readings and the market forecasts of 50.4. It’s worth noting that activity data from Europe and the UK have been upbeat for the said month and exerted additional downside pressure on the Greenback, especially when the concerns about the Federal Reserve’s (Fed) policy pivot mount.

Talking about China, one of the world’s biggest gold customers, the People’s Bank of China (PBoC) has issued a notice to strengthen financial support to private firms and defend the economic recovery. On the same line, China’s Health Ministry ruled out concerns of another deadly virus breakout in the nation after a jump in the cases of flu and other known pathogens. Meanwhile, mixed prints of China’s Industrial Profits for October prod optimism on the commodity front. That said, China’s Industrial Profits improved for the January-October period, from -9.0% to -7.8%, but weakened for October alone with the 2.7% YoY figures compared to 11.9% previous readings.

Elsewhere, the growing doubts about more peace in Gaza, despite the temporary ceasefire between Israel and Hamas, also challenge the Gold buyers. “Hamas freed 17 hostages held in Gaza, including a 4-year-old American girl, while Israel released 39 Palestinian prisoners on Sunday, the third day of their truce,” per Reuters. The news also spots Israeli Prime Minister Benjamin Netanyahu’s readiness for the elimination of Hamas and pours cold water on the face of optimists.

Recently, the pressure on the Bank of England (BoE) to change its governing body has mounted and the same pushed BoE Governor Bailey to renew inflation woes on early Monday. Alternatively, BoJ Governor Ueda defends the easy-money policy but strong Japan Services Prices propel JPY.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

A light calendar ahead…

While mixed feelings test the momentum traders on early Monday, a light calendar could restrict the market moves for the rest of the day. That said, US New Home Sales and speeches from the second-tier central bankers will entertain the traders. However, major attention will be given to Tuesday’s US CB Consumer Confidence, Wednesday’s second readings of the US Q3 GDP, Thursday’s US Core PCE Price, also known as the Fed’s preferred inflation gauge, and FOMC Chairman Jerome Powell’s speech, up for Friday.

May the trading luck be with you!