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Gold eyes record highs as dollar weakness persists

Gold prices consolidated around $2,000 per ounce on Friday with low US holiday trading volumes but advanced to a six-month high today amid dollar weakness, touching $2,018 in Asian hours before trading back to $2,009 …

Gold prices consolidated around $2,000 per ounce on Friday with low US holiday trading volumes but advanced to a six-month high today amid dollar weakness, touching $2,018 in Asian hours before trading back to $2,009 during the New York session.

A triple-top pattern has kept gold below $2,080 since 2020, failing to break that barrier in August 2020, May 2022, and May this year. Bullion now looks positioned to take a fourth crack at that level if the dollar’s descent continues.

XAU/USD Weekly Chart

Easing Treasury yields and anticipated Fed policy easing are also assisting gold, with traders seeing a 50% chance of a rate cut by next May.

With a struggling dollar, a test of gold’s $2,080 May high is on the cards. A decisive break above $2,080 could signal a move towards $2,100, confirming a new technical breakout.

Attention will now turn to speeches from Fed policymakers and critical inflation and consumer spending figures on Wednesday and Friday. The week ends with a final appearance from Fed Chair Jerome Powell before the blackout period ahead of December’s policy decision.

Gold traders will eye manufacturing PMIs from the US on Friday for additional cues, while monitoring market expectations for the trajectory of Fed policy.

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