DBG Markets: Market Report for Dec 12, 2024

Market Overview

GOLD - GOLD prices have reached 2722.268, marking a significant high point following a shift in overall price momentum. The RSI suggests continued buying activity after an exaggerated level print with a slight pullback. While selling pressure arises from price divergence, further buying is expected into the following week. This move aligns with U.S. CPI data showing a 2.7% year-on-year increase in November, meeting consensus expectations. "Lower borrowing costs are positive for gold as the metal doesn't pay interest," says ING's Ewa Manthey in a research report. ING anticipates a 25bps rate cut by the Fed next week, though the subsequent outlook remains uncertain.

The CME FedWatch Tool indicates a 98.5% probability of a rate cut next week, solidifying expectations of near-term dollar weakness. Despite varying views on post-cut forecasts, many analysts foresee dollar strength driven by Trumps pro-inflationary policies. Until then, the outlook for GOLD remains bullish and the dollar bearish. The MACD supports this momentum but suggests a potential early retracement.

SILVER - SILVER prices remain consolidated and stable below 32.5177, with potential for a bullish continuation. Geopolitical risks from various fronts and expectations of a Fed rate cut next week lend support to the market. Bullish trends for SILVER are anticipated in the coming days, confirmed by MACD indications. However, the RSI points to a consolidated market lacking clear directional conviction.

DXY - The dollar retains its gains despite market expectations for a rate cut next week. While 106.848 has capped prices, the potential for further bullish trading against other currencies remains. The dollar continues to be perceived as a more appealing asset relative to others. Overall price action suggests a shift in momentum following a break above the previous swing high, though consolidation is possible. The MACD shows a bearish cross with limited momentum, while the RSI leans towards bearishness as indicated by price divergence. However, with the RSI nearing oversold levels after a slight drop, additional prints are needed for a clearer outlook.

GBPUSD - The pound remains consolidated, with potential for a breakthrough above the current supply-and-demand zone as the MACD trends upward. Despite MACD consolidation and the RSI lacking directional conviction, overall price action suggests a bullish market outlook, supported by expectations of a weaker dollar.

AUDUSD - The Aussie dollar has strengthened in the early Asian session, reaching 0.64086 in reaction to rate cut expectations. Both the MACD and RSI reflect bullish momentum, though the RSI may signal minor pullbacks before further advances.

NZDUSD - The Kiwi also finds strength, albeit weaker than the Aussie dollar, with the MACD showing stronger volume and momentum. The RSI indicates some strength but hints at a pullback as it approaches overbought zones. Additional price prints are awaited for clearer directional signals.

EURUSD - The Euro shows signs of consolidation and weakness against the dollar, despite anticipated dollar softness. While overall price movement suggests continued buying, the RSI points to a bearish market direction with overbought signals despite downward-trending prices. The MACD remains consolidated.

USDJPY - The Yen faces resistance at 152.718 after a sudden wick, reflecting weakness. The MACD is consolidated but leans towards bearish momentum, while the RSI shows oversold levels despite minor declines, suggesting continued bullish momentum. Analysts expect Yen gains against the dollar in the coming days, but a break below 151.700 is required for confirmation of a broader shift.

USDCHF - The Franc trades sluggishly with minor gains, indicating underlying weakness. The MACD signals bearish momentum, while the RSI reflects weaker prints following a small price drop, suggesting continued strength despite current slow trading.

USDCAD - The CAD shows increasing weakness, with sellers struggling despite price divergence. The MACD highlights ongoing selling pressure, while the RSI remains consolidated. Overall price action suggests a bullish market trend, as buying momentum builds against weaker selling forces.