February 5, 2023

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Gold Prices: Inflation data from the USA, gold futures are pulling back decisively from highs

quotes from Gold futureswhich is quoted from the dollar in Comex, fell rapidly in the last session on Monday, after reaching new highs for the period of 1822.9 during the day, at levels not seen since last August 10.

The historical chart with monthly candlesticks shows how the values ​​returned to the negative area compared to the beginning of December, which is what happens after contact with a large resistance area located between 1795/1825 points. Forecasts are likely to further double in the next 3-5 days.

At 8.30pm CET on Monday, December 5, February gold futures were trading at $1,778.5, down -1.71% from Friday’s close.

The negative impact of US data

Among the news that dragged the gold market down today was US service sector data today, which saw stronger-than-expected growth in November. This is an inflationary number, which fuels the Fed’s intentions regarding raising new interest rates, and thus plays against the precious metal.

According to figures from the Institute for Supply Management (ISM), the manufacturing PMI rose to 56.5 in November, up from the October number, and well above the estimate of economic analysts, who had expected a decline to 53.5.

“Growth continues at a faster pace for the services sector, which has grown in all but two of the past 154 months.

The growth rate rebounded in November due to increased business activity and employment,” said Anthony Neves, chair of the ISM Services Business Surveys Committee. The business activity index rose to 64.7%, up from the October reading of 55.7%. At the same time, the new orders index rose to 56. %, up from 56.5% previously.

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Looking at inflation, the report said price pressures remain high but are showing signs of abating.

The 30-minute bar chart depicts today’s price action more accurately, highlighting the steep slope that the pullback is developing from today’s highs. Resistances formed at 1799.4/1804.2 and 1822.0/1825.0. The resistance will represent the largest possible number of points of decline in the event of a new recovery, especially between tonight and tomorrow’s session, Tuesday, December 6th.

Forecasts indicate a target at 1738.0 / 1738.4. The technical signal is short on tests of the new resistance, however from readings not less than 1791.6.

The technical scenario will be canceled only by the final breach of the main resistance, by closing above 1825.0 on the 30-minute chart.