Global Gold Analyticals March 3, 2024 – Analysis and Forecasts – March 3, 2024

Weekly Technical and Fundamental Analysis of Gold – March 3

As you know, the global price of gold has been trading in a small range for the first half of this year. Last working week, It surpassed $2050 on its last business day, reaching its highest level since early February.

The near-term technical outlook for gold looks promising with the market on the rise. But keep in mind that investors will likely ignore technical signs while important US economic news is released next week.

Events in the gold market last week:

In the absence of significant economic news at the beginning of the last business week, global gold did not make much movement and fluctuated in a small range between $2025 and $2039.

Then came Tuesday, when the market was waiting for a report on US durable goods orders.

According to a recent report, US durable goods orders decreased by 6.1% compared to the previous month, which did not receive much response from the market.

The merchants were waiting for important news: U.S. Gross Domestic Product (GDP) It was scheduled to be released on Thursday.
As you know, there are three types of GDP reports in the United States: preliminary, revised, and final GDP.

On Wednesday, the Bureau of Economic Analysis (BEA) announced that the annual growth rate for gross domestic product (GDP) was revised to 3.2% from a preliminary estimate of 3.3%.

With GDP down 0.1% compared to initial estimates, the U.S. dollar came under selling pressure, which could push gold up to around $2037.

Then, on Thursday, global gold prices gained momentum and rose to the important level of $2050. It is worth mentioning that this was the highest gold price in the past month.

Finally on Friday the market waited for the launch. US Personal Consumption Expenditures (PCE) In fact, this is the inflation gauge report, which is the Fed’s favorite indicator.

According to a BEA report, U.S. inflation, as measured by changes in the personal consumption expenditures (PCE) price index, decreased to 2.4% in January.

This figure is in line with market expectations, following the 2.6% increase recorded in December.

After the report was published, the US 10-year Treasury yield fell to 4.3%, which pushed global gold to its highest level in two months at around $2,090 as of the last business day.

But cautious statements from Federal Reserve officials on the U.S. central bank’s policy outlook helped the dollar maintain its position and limited gains in gold prices toward the end of the week.

For example, Atlanta Federal Reserve Bank President Rafael Bostic suggested that it might be appropriate to begin cutting interest rates in the summer.

San Francisco Federal Reserve (Fed) President Mary Daly argued that inflation could become entrenched due to a sharp interest rate cut, and finally, Cleveland President Loretta Mester argued: The Fed also said she and her colleagues cannot expect inflation to continue to fall as it did last year.

In any case, global gold was most affected by PCE inflation data and the decline in the 10-year Treasury yield, soaring to around $2090 before the start of the New Year holiday.

Events in the forex and gold markets next week:

Next week begins with important economic and fundamental news from the US with the ISM Services Purchasing Managers’ Index (PMI).

The US PMI for February is expected to remain above the important 50 level, indicating continued expansion in business activity in the US services sector.

Recall that the Price Paid Index, an important component of the PMI survey, jumped from 56.7 to 64 in January, indicating increased inflation in input costs.

Keep in mind that whenever the ISM Institute’s PMI report is released, the focus should be on the inflation component of the survey.

If Tuesday’s report once again confirms growth in the inflation component, the US dollar will strengthen again and global gold will strengthen again. It will start to decline.

Markets on Wednesday are expected to see two important news related to U.S. employment: ADP job changes and February JOLTS hiring news. These two reports are the first employment-related data of the week before the important NFP report on Friday.

In January, private sector wages increased by 107,000. Keep in mind that readings below 100,000 in the ADP Job Change Report could have a negative impact on the dollar as they indicate weak conditions in the U.S. labor market.

Regarding the second report, JOLTS Jobs, consider that the number of job opportunities has fluctuated by approximately 9 million since October.

Unless the released numbers surprise everyone, regardless of direction, it is unlikely that traders will react to the results of this report before the most important news of the week comes out: the NFP report.

Finally, next Friday, the entire market awaits the important US Jobs report (NFP).

As you may recall, the January NFP report was up an astonishing 353,000. The report’s findings led the Federal Reserve to once again postpone interest rate cuts.

There are actually two very powerful reports. Consumer Price Index (CPI) The Producer Price Index (PPI), along with very strong employment data (NFP), have reassured investors that interest rates will remain higher for longer than US central bank officials expected.

In fact, according to CME Group’s popular tool, the odds of the Fed cutting rates in May are now 25%, and the odds of a rate cut in June are 75%. March and May).

If the NFP report shows a decline close to 150,000 for any reason, the US dollar will face selling pressure from weaker markets. That’s because traders will start speculating that the Federal Reserve will cut interest rates starting in May.

If the NFP report is close to 200,000 for any reason, this indicates that the U.S. labor market is strong enough and that Fed officials can comfortably refrain from raising interest rates until the July meeting. In this scenario, the US dollar would start to rise, with still plenty of room for further upside.

Also, remember that Federal Reserve President Jerome Powell is scheduled to release his six-month monetary policy report next week. Powell is scheduled to testify before the House Financial Services Committee and the Senate Banking, Housing and Urban Affairs Committee on Wednesday and Thursday.

Weekly technical analysis of gold:

Last week, the lower and upper limits for gold prices were $2024 and $2088. If you open today’s daily chart right now and draw the RSI indicator, you can see that the highest point of the indicator is pointing upwards and showing a value of 70. This means that market strength is now under control, and the important 50-day moving average, which has been acting as an important support level for several months and pushing gold prices higher, has now moved below the current price of gold.

If gold can consolidate above this important support level in the coming week, we can expect the global ounce trend to remain strong over the daily timeframe. From a technical perspective, this 50-day moving average has been a huge boost to global gold for several months.

Get an overview of gold ounces around the world.
Key support levels in global gold analysis:
If gold falls, the first important support level will be the important $2080 area. If gold penetrates below this area, the next important price level is $2060. If market weakness pushes gold lower, the next important levels would be $2050 and $2040.

Key Resistance Levels in Global Gold Ounces Analysis:
If gold moves higher, the first important resistance level would be $2090. If gold successfully surpasses this area, the next important level would be $2100. If market strength pushes gold higher, the next resistance levels would be $2,120 and $2,150.

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