The gold price increased slightly in the quiet trading session on Thursday as the U.S. dollar declined during the Thanksgiving holiday.
Possible effects for traders
XAUUSD rose by 0.10% yesterday in a very quiet trading session due to the decline of the U.S. dollar, while the U.S. treasury market remained closed for the holiday. Gold maintained its position above the important 1,990 level. The strength of XAUUSD is largely attributed to the growing anticipation that the Federal Reserve (Fed) may have concluded its cycle of interest rate hikes. Economic reports suggest that the U.S. central bank has effectively eased inflation, reinforcing expectations of a more dovish Fed policy. Lower interest rates decrease the opportunity cost of holding gold. ‘Absent any fresh influences, I still don’t think that gold has the momentum to maintain prices much above 2,000 for the rest of the year,’ said StoneX analyst Rhona O’Connell.
In the Asian and early European trading sessions, gold prices rose due to the weakening of the U.S. dollar. In terms of geopolitical developments, Israel and Hamas initiated a four-day ceasefire this Friday, marking the first break in the conflict that has been ongoing for nearly seven weeks. Easing tensions may put downward pressure on XAUUSD, but some analysts expect the metal to remain strong. ‘Spot gold may retest a resistance at $1,999 per ounce, a break above which could lead to a gain into the 2,009–2,016 range,’ said Reuters analyst Wang Tao.
