Gold Jumps to $2032: Mid-East Tensions Fuel Rise Before Fed Meet
The precious metal gold exhibited steadfastness as the week commenced, with its value appreciating modestly by over 0.70%. Increased Middle East tensions supported this uptick, but a decline in the value of the U.S. dollar, which gave up its earlier gains, counterbalanced it.
In the wake of the Asian trading session, gold (XAU/USD) is trading slightly lower at $2031.60, representing a marginal decline of 0.07%, recovering from the previous week’s trough of $2017.92.
Geopolitical Tensions Underpin Bullish Sentiments
Investors are navigating the markets with heightened prudence as the anticipation builds towards the U.S. Federal Reserve’s impending policy announcement. Despite an intra-day ascent, the U.S. dollar concluded the session virtually flat at 103.47, amid a fall in U.S. Treasury yields.
This backdrop has contributed to Gold’s allure, with geopolitical frictions intensifying in the Middle East region.
Market Outlook Ahead of Fed’s Policy Decision
In response to a drone strike in Jordan that resulted in American casualties, Defense Secretary Lloyd Austin stated that the United States’ defence posture remained resolute. Concurrently, the retreat in the U.S. 10-year Treasury yield by six basis points to 4.07% has augmented gold’s attractiveness.
The CME FedWatch Tool indicates that the market does not anticipate an interest rate reduction until May, projecting a quarter-point cut with absolute certainty. The Federal Reserve decision may recalibrate these expectations, potentially influencing Gold’s trajectory.
Gold Technical Outlook
The 4-hour chart for the gold spot/U.S. dollar is at an inflexion point, hovering around the pivot at $2023. The immediate support levels below this pivotal line are discernible at $2016.558, $2006.258, and $1996.387, marking potential floors where buyers could step in.
Above, resistance levels are established at $2038.016, $2048.101, and $2059.260, acting as ceilings that may cap upward price movements.
Within this framework, gold prices form a symmetrical triangle pattern, signifying a period of indecision as buyers and sellers converge to a point of equilibrium.
A breakout from this pattern could signal the next significant price move. The RSI, slightly tilted toward bullish territory, suggests some buying momentum, though not excessively. Meanwhile, the 50 EMA at $2023.433 shadows the pivot point, reinforcing its significance.
The general trend is tentatively bullish but awaits confirmation as gold approaches the triangle’s apex, with a breakout potentially indicating the direction of the next substantial price move.
Gold XAU Live Chart
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