GLD gold price is set for its first weekly gain after three weeks of losses. This is despite the global sell-off that has cut across the major asset classes. While the US government reopening will lead to the release of crucial economic data, the market doubts of a Fed rate cut before the end of the year.
Nonetheless, a weaker US dollar and persistent economic uncertainties have held gold price above the support zone of $4,100 an ounce. At the time of writing, the bullion was trading at $4,179.
Global sell-off stalls gold price uptrend
On Wednesday, President Trump signed the funding bill into law; ending the longest US government shutdown on record. Market participants now expect a flow of the delayed economic data, while some figures may not see the light of day.
The messy economic calendar, doubts over the Fed’s interest rate cuts, and the global sell-off has curbed gold price rallying. These factors are also weighing on cryptocurrencies, the US dollar, and US stock market. Indeed, the market’s reaction to the US government reopening is a classic case of “buy the rumour, sell the news”.
During the 42-day US government shutdown, investors bet that the economic figures released after the reopening would show a slowing job market. This would in turn push the US central bank to announce at least one more rate cut before the end of the year. However, financial markets are now doubting that the Fed will approve a rate cut during its next meeting in December.
In the last Fed interest rate decision, Jerome Powell indicated that further rate cuts this year are not guaranteed. In addition to the absence of crucial economic data, woes over inflation have some Fed officials hesitant about further monetary policy easing.
Ordinarily, gold price thrives in an environment of lower interest rates. However, a weaker US dollar and persistent economic uncertainties are supporting the precious metal’s uptrend.
GLD gold price technical analysis
The GLD gold ETF hit a fresh three-week high earlier on Friday before easing slightly to $382.87 as at the time of writing. The derivative looks set for a weekly gain after three consecutive weeks in the red.
A look at its daily price chart shows the asset still trading above the 25 and 50-day EMAs. In the ensuing sessions, GLD gold price will likely be range-bound as the bulls strive to retest the all-time high hit about three weeks ago.
More specifically, the range between the support level of $376 and $396 will be worth watching. In fact, this range matches the zone between the middle and upper Bollinger bands. On the flip side, a pullback past that range will likely activate the support along the 25-day EMA at $370.
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