On Monday (November 25), gold prices' upward momentum came to an abrupt halt, dropping below the $2630 mark under selling pressure and hitting a low of $2625. This move indicates weakening bullish momentum, with the market entering a bearish control phase.
According to market analysts' predictions, if bears continue to push gold prices lower and break the crucial support level of $2600, the prices may further decline towards the 100-day moving average, currently at $2565.76. If this level is breached, the next target would be the November 14 low of $2536.
In contrast, bulls need to reverse the current situation, with the primary task of reclaiming the 50-day moving average and stabilizing above $2630. Once gold prices break above $2700 again, bulls would aim for $2750, followed closely by the historical high of $2790.
Technical Indicators Show Bearish Market Control
Technical analysis indicates that gold prices are currently facing strong selling pressure. Oscillators like the Relative Strength Index (RSI) have turned bearish, suggesting that bears are dominating the market. Analysts have noted that the break below $2630 has heightened concerns about further downside, with selling possibly prevailing in the short term.
Macroeconomic Background and Impact
Recent fluctuations in gold prices are influenced by multiple macroeconomic factors, including the strong rebound of the dollar and rising bond yields, which have diminished gold's appeal as a safe-haven asset. Additionally, the relative calm in geopolitical situations and investors' focus on U.S. economic data have also pressured gold prices.
This week, the market will focus on several critical economic data, including the Fed's preferred core PCE price index and the revised GDP figures. These data points will provide more clues on the Fed's next monetary policy steps and could have a crucial impact on gold price movements.
Market Outlook: Short-term Pressure, Focus on Key Support
In the short term, gold prices may remain under pressure, with market sentiment driven by further bearish actions and the release of economic data. However, if gold prices can stabilize above $2630 and break through $2700, bulls may regain control.
Investors should closely monitor gold's performance at key support levels and the guidance from macroeconomic data, especially given the uncertainties surrounding geopolitical tensions and Fed policy directions, as the market could experience greater volatility.
