Gold Price Hits 2023 Highs, Awaits Central Bank Decisions and Economic Data
The price of GOLD (XAU/USD) surged past the psychologically significant $2,000 level on Friday, marking its highest point since May 16 and marking its third consecutive weekly gain. The ongoing Israel-Hamas conflict has fueled safe-haven demand, providing support for the precious metal.
However, traders are exercising caution, refraining from aggressive bullish positions as they await crucial central bank events this week. The Bank of Japan (BoJ) is set to announce its policy decision on Tuesday, followed by pivotal monetary policy updates from the Federal Reserve (Fed) on Wednesday and the Bank of England (BoE) meeting on Thursday.
Investors are also closely watching China’s official PMIs for insights into the world’s second-largest economy. Additionally, preliminary EuroZone GDP and CPI data, along with the US monthly jobs report (NFP), will likely impact GOLD prices. Despite the potential for Fed tightening, which supports the US Dollar (USD), the XAU/USD bulls remain cautious during the Asian session on Monday. While there is no significant follow-through selling, bearish traders should exercise caution and consider potential corrective declines.
Technical Analysis:
GOLD Price Faces Slight Overbought Conditions, Potential Consolidation
From a technical standpoint, the daily chart’s Relative Strength Index (RSI) indicates slightly overbought conditions, prompting caution among gold bulls. It is advisable to await short-term consolidation or a modest pullback before considering further long positions in the gold market.
Critical support is expected around the $1,986–1,985 horizontal resistance level, serving as a pivot point.
A breach of this level could lead to a decline towards the $1,972 support zone. Conversely, continued buying above the $2,005 area, last reached on Friday, may pave the way for further gains toward the next significant hurdle around $2,022.
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