09 Dec 2024

• Gold price holds rebound from weekly lows early Monday, $2,650 retested.      
• The US Dollar clings to NFP-led recovery amid muted Treasury yields, Middle East geopolitical risks.
• Daily RSI prods 50 level again as Gold buyers regain 21-day SMA. Where next?
• Gold prices are experiencing a rebound from their weekly lows early on Monday, with a retest at $2,650. The US Dollar maintains its recovery following the Non-Farm Payrolls report, despite subdued Treasury yields and ongoing geopolitical tensions in the Middle East. The daily Relative Strength Index is once again approaching the 50 level as gold buyers reclaim the 21-day Simple Moving Average. What are the next potential movements?
• Gold's price is encountering selling pressure at $2,650 early on Monday, following a recent increase driven by escalating geopolitical tensions in the Middle East. Concurrently, traders are adjusting their positions in anticipation of the upcoming US inflation data, which is providing some support to the price of gold.
  
  As the week begins, gold prices are returning to a stable range amidst a relatively calm start to a significant week. Asian traders commenced their activities on Monday, responding to the news from the weekend regarding Syrian rebels capturing the capital, Damascus, and forcing President Bashar al-Assad to flee to Russia with his family in search of asylum. The fall of Assad's regime marks the conclusion of a 13-year civil conflict and over five decades of his family's oppressive governance.
• The United Nations (UN) is expected to hold an emergency closed-door meeting on Monday to address the ongoing situation in Syria. Investors are exercising caution due to various risks emerging from the Middle East, despite Israel having reached a ceasefire agreement with the Lebanese militant group Hezbollah a week prior.
  
  Additionally, there is a sense of apprehension as the market anticipates the release of this week’s US Consumer Price Index (CPI) data, particularly following Friday’s labor report which indicated a rebound in Nonfarm Payrolls by 227,000 in November, surpassing the projected increase of 200,000. The Unemployment Rate rose slightly to 4.2% during the same timeframe, aligning with expectations.
  
  In light of the significant increase in the Nonfarm Payrolls figure, market participants have heightened their expectations for a US Federal Reserve (Fed) interest rate cut this month, with probabilities exceeding 80%, as indicated by the CME Group’s FedWatch Tool. This shift in sentiment contributed to Gold prices recovering from an initial drop to a weekly low of $2,613 following the labor data announcement.
  
  Looking forward, geopolitical events are anticipated to play a crucial role in shaping risk sentiment, thereby affecting safe-haven assets such as Gold, the US Dollar (USD), and US Treasuries.
  
  In addition to the political turmoil in Syria, South Korea is facing similar challenges, as President Yoon Suk Yeol successfully navigated an impeachment vote on Saturday. The People Power Party, led by Yoon, chose to boycott the impeachment proceedings initiated by opposition parties.
  
  Furthermore, there is growing optimism regarding potential stimulus measures from China, following consumer inflation data that indicated persistent demand weakness in the world's largest consumer market. This optimism regarding China's economic support is likely to positively influence the non-yielding Gold price. China's CPI for November fell short of expectations, registering a year-on-year increase of 0.2%, down from a 0.3% rise in October.