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MARKET ANALYSIS AND COMMENTARY - WEEK 48 - 2023 This week, international gold prices opened at 1,977$, then decreased slightly to 1,964$, then continuously increased sharply beyond 2,000$ to 2,007$ and closed the week at 2,002$.
The reason why international gold prices have continued to increase sharply this week is because the USD has weakened compared to major currencies because investors expect that the FED may have ended the cycle of raising interest rates and will cut interest rates. in mid-2024.
The FED's monetary policy is having a strong impact on short-term gold prices. In fact, the FED's monetary policy will depend on US GDP and inflation. In particular, inflation has continuously tended to decrease in recent times. While GDP in the third quarter announced for the first time increased to 4.9% over the same period last year, higher than 2.1% in the second quarter. The first revised GDP in the third quarter announced next week is expected to increase. up to 5%. This will support the USD, while increasing expectations that inflationary pressures will increase again, making it unlikely that the FED will consider cutting interest rates.
However, US GDP in the fourth quarter is forecast to decrease sharply compared to the third quarter. If this forecast is accurate, it will contribute to reducing inflation. At that time, the FED will certainly have to completely stop raising interest rates to prepare for the interest rate cutting cycle next year. This will support gold prices in the medium term.
Next week, OPEC+ will also consider oil production. If this organization cuts production, it will push up oil prices, thereby increasing inflationary pressure. In addition, the temporary ceasefire between Israel and Hamas caused the haven demand for gold to decline. These are factors that pose a risk of profit taking by many investors, causing gold prices to adjust next week.
Technically, if next week's gold price surpasses 2,012$, it will still likely reach 2,050-2,075$, corresponding to extended fibo milestones with the D1 time frame ptkt chart. The trading plan for next week will consider buying around the 1965$ mark, selling around the 2050$ mark, accepting a stop loss of 5 prices for each strategy.
