Gold Prices Waver as Fed’s Rate Path Uncertainty Lingers
GOLD (XAU/USD) encountered resistance after reaching the $2,040 mark on Tuesday, closing with modest gains. During Wednesday’s Asian session, the metal’s progress was hindered as traders await more clarity on the Federal Reserve’s rate cut plans.
The forthcoming U.S. consumer inflation data, scheduled for release on Thursday, is expected to significantly influence gold’s short-term direction.
Investors are reassessing their expectations for the Fed’s monetary policy following the robust U.S. job data for December, which underlined a resilient labor market. This has bolstered U.S. Treasury yields, consequently strengthening the U.S. Dollar and limiting gains in gold, a non-yielding asset.
However, GOLD finds some support from geopolitical tensions and concerns over China’s economic recovery.
Uncertainty regarding the Fed’s rate cut timeline is making traders hesitant to commit to new positions in gold. A recent report from the New York Fed showed a drop in U.S. consumer inflation expectations, stirring speculation about the Fed’s policy adjustments.
The resilient U.S. economy and persistently high inflation give the Fed leeway to maintain higher interest rates, supporting the U.S. Dollar and capping gains in gold.
Investors are cautiously observing the situation, especially with the upcoming U.S. consumer inflation figures, which could offer further market direction. No significant U.S. economic data is expected on Wednesday, leaving gold prices influenced primarily by USD dynamics.
Gold Technical Outlook:
GOLD is exhibiting a slight bearish bias, potentially heading towards the 2016.90 level within a minor bearish channel. This movement supports the possibility of a continued downtrend in the short term, with a break below the mentioned level potentially extending the corrective bearish wave towards 1977.46.
The bearish outlook remains plausible, influenced by negative pressure from the EMA50. However, breaching 2065.70 could halt this decline, steering gold back towards its main bullish trend.
Today’s expected trading range is between 2010.00 support and 2045.00 resistance, with a bearish trend anticipated for the day.
Gold Live Chart
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