Today’s modest increase in gold prices was due to lower trading volumes caused by the US markets’ Thanksgiving break, with XAU/USD trading at $1992. The precious metal has remained in the narrow range of $1990–$2000 thanks to support from a drop in the United States Treasury yields and a weakening of the US dollar.
US Treasury bond yields have fallen precipitously since the start of November, by more than six percent, or almost 30 basis points. Simultaneously, the United States dollar has depreciated significantly relative to other major currencies; the DXY index dropped from above 106 to below 104, signifying a decline of almost 3 percent.
Gold briefly broke through the $2000 barrier earlier this week, and it has since stayed close to that level.
This performance occurs at the same time that market players are preparing for the release of next S&P Global PMIs, which may indicate economic difficulties and have an impact on interest rate decisions made by the Federal Reserve.
Gold’s trajectory seems unwavering despite forecasts of more rate hikes by the Federal Reserve and a roughly 85 basis point decline in money market futures for the upcoming year.
Technical analysis indicates that gold may run into resistance at $2010 if it is able to break above the $2000 mark once more.
Due to the potential for significant effects on the price movements of gold and other important financial indicators, investors are closely monitoring these developments.