The gold prices on Thursday once again recorded faster. Gold scattered its shinings while pushing the edge starting from the previous business session, as Mitchie heavy-solder in tech shares on Wall Street had pulled the attention of the whole market
AFTER THE TREMENDOUS VICTORY OF THE DEMOCRATIC PARTY IN THE U.S. MEDIUM-TERM ELECTIONS, THE CONCERNS OF STRICT GOVERNMENT REGULATIONS HAVE ARISEN ON THE ARTIFICIAL INTELLIGENCE I.E. AI INDUSTRY. IN THE SAME PANIC, TRADERS BEGAN TO SELL TECH SHARES TO THE TALISMAN AND TURNED TOWARDS SAFE INVESTMENT OPTIONS LIKE TREASURY BONDS, JAPANESE YEN AND GOLD
Market rates and political events:
Spot gold closed at $4,089.12 per ounce with a speed of 0.7%, while Gold Futures increased by 0.6% and stabilized at $4,097.90 per ounce
DEMOCRATS’ VICTORY IN THE U.S. MID-TERM ELECTIONS MADE A HUGE UNCERTAINTY FROM THE MARKET, BUT NOW INVESTORS HAVE BECOME MORE AWARE OF ITS POLITICAL OUTCOMES. THE FEAR OF BEING THE CONTROL OF DEMOCRATS IN BOTH THE HOUSES OF THE US PARLIAMENT HAS INCREASED THAT THE GOVERNMENT CAN IMPLEMENT STRINGENT RULES ON AI TECHNOLOGY AND TRY TO SLOW THE PACE OF EXPANSION OF LARGE DATA CENTERS
SINCE THE MASSIVE DEVELOPMENT OF AI INFRASTRUCTURE HAS PLAYED A VERY IMPORTANT ROLE IN SPEEDING UP THE US ECONOMY, IT CAN LEAD TO ECONOMIC GROWTH SLUGGISH IF THERE IS AN IMPACT ON THIS SECTOR AND ALSO REDUCE THE DOLLAR STRENGTH. WEAK DOLLARS PROVE ALWAYS BENEFICIAL FOR GOLD, AS IT MAKES YELLOW METAL CHEAPER FOR FOREIGN BUYERS
Signs of relief from Copper:
According to the Chief Cross-Acet Strategist Adam Turncwist of LPL Financial, even if the copper is not a precious metal, it has given some relief signals to the market
TURNCWIST POINTED OUT THAT THE AI TRADE HAS CAUSED CONSIDERABLE TECHNICAL DAMAGE DUE TO THE CONCERNS OF POTENTIAL SLUGGISHNESS IN THE CAPITAL EXPENDITURE CYCLE. HOWEVER, COPPER HAS NOT YET CONFIRMED THIS SLOWDOWN. COPPER IS EXTREMELY IMPORTANT INPUT FOR DATA CENTER CONSTRUCTION AND AI INFRASTRUCTURE, AND IT STILL REMAINS UP TO ITS GROWING 200-DAY MOVING AVERAGE AND LOWER LEVELS OF SEPTEMBER. THE DIFFERENCE INDICATES THAT THE AI SHARES HAVE BECOME MORE AGGRESSIVE
TURNCWIST ALSO ADDED THAT AT THE MOMENT COPPER IS AN IMPORTANT CONFIRMATION SIGNAL. IF THE COPPER BREAKS DOWN FROM ITS SUPPORT LEVEL, IT WILL LIKELY STRENGTHEN THAT THE MARKET HAS BECOME A BIG TOP AND THE AI SLOWS DOWN INTO THE STORY
US Economic Statistics and Fed’s Policies:
Traders who monitor the policies of the Central Bank are also seen on the U.S. Economic Calendar between the decline in Tech shares
According to the U.S. Department of Labour, the number of early unemployment claims in the week ended on October 31, came at 6,000 injectors 1,89,000. In addition, a separate report from the Challenger, Gray and Christmas reported that the US trimmed in October remained 43,994, which is the lowest level of this month since 2023
This data has come after better data from the hope of U.S. private employment in October and the job openings reached a high level of four months. Now all the perspectives are on non-form payrolls data released on Friday, which will play an important roll in deciding the Federal Reserve’s strategy with interest rates. The central bank may consider increasing rates in December to overcome inflation. If the Labour Market remains strong, the Fed will get further discounts to increase the interest rates. Usually the high interest rate environment puts pressure on the properties with interest without gold
Crude oil moves:
Brent Crude Futures 4.9% climbed to another part of the commodity market closed at a barrel of $99.25. Earlier on Wednesday, it was likely that the results of the medium-term elections can accelerate the diplomatic solution of the Iran war. The oil’s expressions were suddenly broken and the Brent Crude went to the lowest of two months by falling under 100 dollars per barrel
Findings for Gold traders:
The fall of Tech Shares on Wall Street and the gold on the weaker dollar side is getting good support. However, traders should take extreme caution to the US non-form payroll data coming on Friday. If the Labour data remains strong and the hopes of increasing the interest rates of the Fed may take a break at the speed of gold. So traders should strictly follow the stop-loss at the existing levels