Gold prices today (Nov 20) are moving to the downside. Profit taking from selling pressure is putting pressure on gold prices. After the rally moved to its highest level in 2 weeks, however, the price of gold still has important support in the direction of the correction down the dollar and US bond yields as investors hope that the Federal Reserve (Fed) will stop raising interest rates. Additionally, interest rates may be cut sooner than previously expected. Currently, there is also additional pressure from the value of the yuan currency. After the People’s Bank of China (PBOC) announced that interest rates would be kept on hold. Prime Consumer Loans (LPR) have 1-year and 5-year terms, which are considered to maintain low interest rates. This supports the recovery of the Chinese economy after the PPOC injected the largest amount of money into the banking system in 7 years last week, so the market is optimistic about this. The direction of the Chinese economy is increasing. This situation also boosts the purchasing power of gold in the global market. Due to China being a huge consumer of gold, the price of gold gets additional support from the above issues. Meanwhile, this afternoon, officials from the European Central Bank (ECB) expressed their support for raising interest rates again if investor expectations undermine policy decisions. The euro rose again, pushing the dollar down. Lowest level in 12 weeks. However, such comments may increase the negative outlook for the EU economy as well. So the value of the Euro can only increase for a limited period of time. As a result, the value of the dollar is recovering. Both technical purchasing power and pressure are easing, but the dollar is expected to remain low. Hence, gold prices may increase further. Investors are weighing on expectations that the central bank will start cutting interest rates for the first time in March.
• Buy short-term speculations. If the price declines and does not break the support zone of 1,966-1,949 dollars per ounce.
• Sell gradually to earn profit. 1,993-2,009 dollars per ounce if the price does not rise through the resistance area.
• Buy and cut loss positions. If the price does not fall below the support level of $1,949 per ounce.
This article was prepared by YLG Bullion International.
For more information, contact 02-687-9888 1 or website ylgbullion.co.th
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