Gold’s Tenuous Recovery: Weighing Fed Hawkishness Against Geopolitical Uncertainties
Arslan Butt•Monday, January 22, 2024•1 min read
Friday’s robust consumer sentiment data paints a picture of a resilient economy, inadvertently dampening the allure of gold.Fed’s Hawkish Tone: A Challenge for GOLD BullsThe market’s recalibration of interest rate cut expectations, fueled by the hawkish rhetoric from Federal Reserve officials, exerts additional pressure on the non-interest-bearing asset.
This hawkish sentiment from the Fed creates a challenging environment for gold, traditionally sought after during periods of monetary easing.Equities’ Optimism and Geopolitical Risks: A Duel of SentimentsWhile a generally buoyant equity market atmosphere adds to the headwinds for GOLD prices, escalating tensions in the Middle East and China’s economic challenges may underpin gold’s safe-haven status.
The resulting risk aversion has led to a slight retreat in US Treasury yields, placing the US Dollar on a tentative footing.
Gold Technical Outlook
Gold’s positioning around the EMA50 is a critical juncture as the Stochastic oscillator begins to show a build-up of positive momentum, hinting at a possible continuation of the intraday bullish trend.
The anticipated upward trajectory eyes the $2065.70 level as its next significant milestone.The prevailing bullish sentiment in the gold market is expected to persist, with the caveat that a breach below the $2016.90 support could halt the rally, leading to a potential bearish correction towards the $1977.46 level.
The GOLD market is poised within a projected trading corridor, with support around $2010.00 and resistance near $2045.00, as the bullish trend for the day endures, contingent on prevailing market dynamics and sentiment.
Gold XAU Live Chart
GOLD
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ABOUT THE AUTHOR
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Arslan Butt
Index & Commodity Analyst
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.
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