Gold: Wobbly Wednesday Set to Determine Next Direction

Since I wrote my last analysis, gold futures have witnessed a selling spree amid hopes of the advent of a rate cut in 2024 as the macroeconomic data looks quite supportive for the Federal Reserve to stop further rate hikes in near future.

Technical indicators look ready to confirm the continuity of price exhaustion in gold as the weekly candle formed this week looks evident enough to have another bearish candle during the upcoming week.

Upside in gold prices looks limited as the Feb. 2024 gold futures defined the upside this Friday with an extended volatile move between the range of $2010.60 to 2050.30, before closing the week at $2020.70, with a loss of $25.70 daily basis while the weekly loss was of $131.45, from the peak level tested during the week was at $2152.15.




In a daily chart, gold futures look ready to continue sliding if not able to defend the immediate support at 18 DMA, currently at $2012.96.

Gold bears could continue to thrash the bulls if supportive comments from the Federal Reserve on Dec. 13, 2023 favor a rate cut.

No doubt, a sustainable move by the gold futures below the significant support in the daily chart at 200 DMA, currently at $1962, during the upcoming week, fall could turn steeper than expected amid growing volatility.




In a weekly chart, gold futures are likely to remain in bearish territory if not able to defend the immediate support at $2002.52.

In such a scenario, the gold futures could find some support at 9 DMA, currently at $1994.52, and the second support at 18 DMA, currently at $1955.15, confirm that the upcoming weekly movement by the gold futures, below the level of $1955, could result in long-term bearish mode.




After having a look at the quantum of interest rate hikes by the Fed since May 4, 2022, from 1% to a maximum of 5.5% on July 26, 2023, but since then the stagnant view confirms a retrieval by the Fed from hikes to cuts now amid favorable macro-economic data.

Finally, I conclude that the gold futures could witness extreme volatility during the upcoming week, but the overall trend looks bearish, which is yet to get confirmation on Dec.13, 2023.

Disclaimer: The author of this analysis may or may not have any position in the Gold futures. Readers can take any long or short trading position at their own risk.