Gold Price Forecast: XAU/USD Clings to $2,032 Ahead of Inflation Data
Gold (XAU/USD) is modestly up from the previous day’s trough near $2,021, now trading around $2,032. Given the robustness of the U.S. economy, persistent expectations that the Federal Reserve will maintain elevated interest rates have been exerting pressure on non-interest-bearing bullion.
Meanwhile, the prevalent buoyant market mood also limits the traditional safe-haven’s gains.
Federal Reserve Stance Underpins Dollar, Influencing Gold
However, the downside for gold appears somewhat contained due to lingering ambiguities over the Federal Reserve’s rate reduction timeline and magnitude in 2024.
Despite the recent hawkish rhetoric from various Federal Open Market Committee (FOMC) members, including Chair Jerome Powell, the market is still betting on a series of rate cuts throughout the year, which keeps the dollar’s advances checked under a three-month peak, consequently supporting gold prices.
Market’s Anticipation for Inflation Data and Gold’s Range-Bound Movement
Investors exhibit a cautious approach, opting to stand by for the upcoming U.S. consumer inflation data crucial for shaping the Fed’s forthcoming policy measures.
This anticipated data is likely to be a significant determinant of the dollar’s trajectory shortly and could provide a substantial thrust, potentially breaking gold out of its weeks-long range.
Until then, gold’s price action might continue to meander within its established boundaries.
Headwinds from Economic Data and Fed’s Hawkishness
The gold market is also navigating through headwinds from recent solid U.S. economic figures and the Fed’s hawkish discourse, which dampens the prospects of aggressive rate cuts within the year.
Chair Powell’s dismissal of an imminent rate cut in March, echoed by sentiments from Richmond Fed’s Thomas Barkin, reinforces the case for a cautious Fed. These factors keep the yields on U.S. treasuries above the 4.0% threshold, weighing on XAU/USD, though a subdued dollar offers some respite, mitigating further losses.
Inflation Figures to Cast Next Direction for Gold
As the market’s gaze turns to the impending U.S. consumer inflation report, there is anticipation for fresh momentum that will dictate the gold market’s direction. With the metal poised for a slight weekly decline yet trapped within the confines of a range that has persisted since the year’s start, traders are advised to tread lightly in their directional commitments.
Gold Price Forecast: Technical Outlook
In today’s session, Gold’s technical analysis presents a crucial juncture. The precious metal is trading slightly lower at $2,032.87, reflecting a cautious sentiment among traders. Gold’s pivot point stands at $2,033.05, marking a threshold for bullish or bearish biases.
Above this line, we encounter resistance levels at $2,044.73, $2,057.33, and $2,068.63, which could hinder upward momentum. Conversely, support levels are positioned at $2,020.71 and $2,011.36, with a stronger psychological floor at $2,002.05, potentially cushioning any declines.
The Relative Strength Index (RSI) hovers around the midpoint at 49.71, signalling a balanced market.
The 50-Day Exponential Moving Average (EMA) aligns closely with the pivot, at $2,033.29, suggesting potential for price swings.
The observed downward trendline extending resistance near the $2,033 level signifies that a decisive break above could trigger a bullish trend while staying below could maintain bearish pressure.
Gold XAU Live Chart
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