Gold Prices Climb as Fed Signals End to Rate Hikes, Eyes on Central Bank Decisions
Continuing its ascent from a three-week low near the $1,973 mark, GOLD (XAU/USD) maintains its positive trajectory into a second consecutive day.
This follows the Federal Reserve’s indication that it may cease interest rate hikes, with projections showing potential for three rate reductions in 2024, aligning with the Fed’s inflation targets. Subsequently, a sharp drop in U.S. Treasury yields and a weakened U.S. Dollar have buoyed the precious metal, which typically thrives in low-yield environments.
The U.S. Dollar’s descent persists throughout the Asian trading session, with Gold’s advance somewhat restrained by a prevailing risk-on market sentiment, hovering near the critical $2,040 resistance zone.
Investors exhibit caution as they await policy updates from the Swiss National Bank, the Bank of England, and the European Central Bank. Additionally, forthcoming U.S. Retail Sales data could offer fresh momentum for the commodity. Despite these factors, the underlying economic narrative appears to favor Gold’s continued appreciation.
Wednesday’s Fed announcement maintained interest rates at their highest in over two decades, while signaling a softer policy stance moving forward. Policymakers project inflation to converge on the 2% goal without triggering a recession, and interest rates peaking at a lower-than-previously-expected 4.6% in 2024.
Inflation indicators also point to slowing price increases, bolstering market expectations for rate cuts as early as March, with a subsequent cut in May now seen as highly probable. The resulting plunge in U.S. bond yields supports GOLD prices, although imminent central bank announcements and U.S. economic data releases could contribute to volatility.
Gold Technical Outlook
In today’s technical outlook, GOLD has made a significant move, breaking through the $2,016.90 barrier and hinting at a resurgence within its bullish channel. This suggests a halt to the recent bearish trend, potentially ushering in a return to the overarching bullish momentum, with targets set around $2,065.70.
Today’s market conditions may exhibit some sideways movement due to short-term stochastic fluctuations, but the general outlook remains bullish, provided the GOLD price sustains above the $2,016.90 level.
The anticipated trading range is between $2,020.00 support and $2,055.00 resistance, with a bullish trend expected for the day.
Gold XAU Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals