KVB Market Analysis | 28 Nov: Gold Prices Decline as Rising Personal Income Impacts XAU/USD

Product: XAU/USD

Prediction: Decrease

Fundamental Analysis:

Gold prices fell from their daily high as sellers took control, raising the risk of further decline. The main reason for the drop is rising personal incomes. Data on Wednesday showed U.S. personal income in October increased by 0.6% month-on-month, higher than the expected 0.3%. If consumers earn more, they may handle higher inflation better, making the Federal Reserve less likely to cut interest rates aggressively. The revised U.S. GDP growth for Q3 stayed at 2.8%, slightly slower than Q2's 3%. However, the report shows the economy remains strong, with GDP growth above 2% in eight of the last nine quarters. On Thursday morning in Asia, spot gold dropped sharply from its high of $2638.50/oz, hitting a low of $2621.08/oz.

Technical Analysis:

After sellers pushed gold below $2700/oz, the outlook for gold is neutral to bearish. Gold is forming a pattern of lower highs and lower lows. Indicators like the Relative Strength Index (RSI) have turned bearish, showing sellers are in control. If sellers push gold below $2600/oz, it could drop further to test the 100-day moving average at $2568/oz, and then the November 14 low of $2536/oz. On the upside, if buyers reclaim the 50-day moving average at $2667/oz, it might open the way to retest $2700/oz. A break above this level could target $2750/oz and the record high of $2790/oz.

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis:

The U.S. economy grew at an annualized rate of 2.8% from July to September, driven by strong consumer spending and higher exports, according to the Commerce Department on Wednesday. This matches earlier estimates and highlights the economy‘s resilience. The U.S. dollar weakened in light trading ahead of Thanksgiving, as investors evaluated the risks of potential tariff actions from Trump. The Dollar Index (DXY) dropped 0.74% to 106.06, the lowest since November 13. The Japanese yen gained strength, supported by speculation about a December rate hike by the Bank of Japan and market adjustments. Japan’s low tariff risk also provided relief to investors.

Technical Analysis:

From a technical view, USD/JPY dropping below the 100-period Simple Moving Average (SMA) suggests a possible further decline. The pair may find support near the 153.30-153.25 range, followed by the 153.00 level. If 153.00 breaks clearly, it could trigger more selling and push prices towards the mid-152.00s, aiming for the 200-day SMA near 152.00. On the upside, 154.00 acts as the first resistance, followed by 154.40. If buying continues, the pair could reclaim 155.00 and move toward 155.40-155.50. A stronger push may lead to a rise above 156.00, targeting the multi-month high of 156.75 from November 15.

Product: BTC/USD

Prediction: Increase

Fundamental Analysis:

U.S. President-elect Donald Trump has announced plans to create a pro-cryptocurrency cabinet and promised to establish Bitcoin as part of a national strategic reserve. Following this, Canada is also showing interest. Vancouver Mayor Ken Sim has proposed adopting Bitcoin as a strategic reserve asset, aiming to make the city Bitcoin-friendly. Ken Sim announced that Vancouver plans to add Bitcoin to its balance sheet as part of its efforts to diversify investments. Trump has appointed billionaire Elon Musk to lead the new Department of Government Efficiency (DOGE), Robert F. Kennedy Jr. as Secretary of Health and Human Services, and Howard Lutnick as Commerce Secretary. He also assured the crypto community that the next SEC chair would support digital assets.

Technical Analysis:

Bitcoin has broken below its upward trendline but found support at the 20-day Exponential Moving Average (EMA) at $89,857. On Wednesday, buyers pushed the price back above the trendline, indicating strong demand at lower levels. If the price stays above the trendline, Bitcoin could rise to the key psychological level of $100,000. Sellers are likely to defend this level strongly, but if buyers succeed, the price could jump to $113,331 and then to $125,000. However, if the price drops significantly below the 20-day EMA, this bullish outlook may no longer hold. Bitcoin could then fall to $85,000, a level where buyers are expected to step in.