Gold Prices Are Skyrocketing As The Fed Prepares To Loosen Monetary Policy

Earlier on Monday in the Asian session, gold prices approached an important resistance level of $1,920.00

Arslan Butt•Monday, January 16, 2023•1 min read

Earlier on Monday in the Asian session, GOLD prices approached an important resistance level of $1,920.00 before stagnating in a sideways pattern. After breaking through the round-level resistance of $1,900 for the first time in eight months, the precious metal saw significant buying interest. In addition, a drop in the US Dollar Index (DXY) aided the Gold price increase.

The risk profile remains positive, with the S&P500 posting a four-day winning run as the Federal Reserve (Fed) prepares to slow its current policy tightening pace following a solid decrease in December’s inflation data. Despite the risk appetite theme, the return on US Treasury bonds remains steady, rising to 3.50%. Despite an increase in US consumer confidence data on Friday, the US Dollar Index stayed below 101.80.

Consumer Confidence was announced by the University of Michigan at 64.6, exceeding estimates of 60.5. The street is aware that retail demand has slowed; so, the catalyst that has encouraged consumers is decreased inflation, driven by lower gasoline prices.

Wells Fargo analysts believe that the respite in inflation and wage growth is raising moods, but they warn that the still-sour buying conditions signal that the good sentiments in this report may not transfer into a spending spree.

XAU/USD Technical Outlook

GOLD price shows more positive trades to break through 1,900 and confirm the continuation of the bullish trend dominance in the coming sessions, paving the way for a move towards 1,928.60 and 1,950 as the next positive station, with more gains expected for the rest of the day conditioned by price stability above 1882.

Today’s trading range is likely to be between 1,900 support and 1,950 resistance.

Today’s projected trend: bullish

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.