Gold Price Forecast: XAU/USD Dips to $2,035 Ahead of FOMC Amid Dollar Rally
Arslan Butt•Wednesday, January 31, 2024•2 min read
Monetary Policy Anticipation Affects Gold Valuations
While the US Dollar approaches levels not seen since mid-December, potentially capping upside momentum, subdued Treasury yields suggest tempered market anticipation for aggressive Fed policy shifts.
Gold prices now hinge on the forthcoming Federal Open Market Committee (FOMC) meeting outcomes, with investors eager for insights into the Fed’s rate-cut trajectory.
Geopolitical and Economic Factors Provide a Floor for Gold Price
Despite the USD’s ascendancy amid optimistic US economic forecasts and consumer confidence data, factors such as Middle Eastern tensions and China’s prolonged economic recovery provide a safety net against a steep decline in gold prices.
The market’s eyes are now trained on the FOMC decision, which is expected to give definitive direction to the XAU/USD pair amidst these geopolitical and economic narratives.
Gold Price Forecast: Technical Outlook
Gold’s market performance, as of the latest four-hour chart, presents a study in resilience amid market volatility. The precious metal is trading at $2,033.54, just shy of the pivot point indicated by the green line at $2,037.92.
Resistance levels loom overhead at $2,048.10, $2,056.89, and $2,065.70, serving as potential barriers to an upward price trajectory. Meanwhile, support forms beneath $2,026.09, with subsequent levels at $2,021.65 and $2,013.35, which could offer a rebound should prices retract.
The Relative Strength Index (RSI) reads at 56.97, suggesting a market in balance—neither overbought nor oversold.
The 50-day Exponential Moving Average (EMA) at $2,026.09 provides a dynamic support level that gold prices have recently tested and stayed above. Let’s consider selling below the $2,035 mark today.
Gold XAU Live Chart
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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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