Gold prices rose to their highest level in nearly three weeks on Tuesday.
The reason is that gold was supported by expectations that the end of the U.S. government shutdown and the resumption of economic data releases could pave the way for the Federal Reserve (Fed) to cut interest rates next month.
Experts believe that the market is about to witness a series of economic data showing signs of weakness in the U.S. economy. This will contribute to the possibility that the Fed will continue to cut interest rates in December.
Therefore, the reopening of the government may not necessarily be a negative signal for gold prices. On the contrary, it could continue to support a strong rally in gold in the near future as the U.S. economy shows increasing signs of weakness.
Technical Analysis:
Currently, gold prices are trading in an important range. In the short term, there are two possible scenarios:
1: If gold follows the double-top pattern, a deep correction may occur, pushing prices below the 4,100 USD level and trading within the 4,000 – 4,100 USD/ounce range.
2: If gold breaks out above the 4,153 USD level, it could trigger a strong bullish momentum, pushing prices toward the 4,26x USD/ounce zone.
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