GOLD Price Analysis – February 24, 2023

Daily Price Outlook

The XAU/USD is currently trading at $1,826.68, reflecting a 0.24% increase over the past 24 hours. Although gold prices saw a slight gain, they were on track to close the week with losses for the fourth consecutive week due to the persistent uncertainty surrounding US monetary policy.

US Preliminary GDP Figures and Their Impact on Gold Prices

On February 23, the US Bureau of Economic Analysis (BEA) released the second estimate, revealing that the actual Gross Domestic Product (GDP) of the US increased at an annualized rate of 2.7% in the fourth quarter, falling below both the market forecast of 2.9% and the initial estimate.

As a result, the US Dollar Index (DXY) experienced a slight decrease, trading at 104.53, down 0.07% in 24 hours. However, gold prices showed some recovery as US fourth-quarter GDP numbers were revised downward.

Softer US Treasury Bond Yields: What It Means for Gold

Over the past three days, US benchmark Treasury bond yields have been falling, despite ongoing concerns about a recession and rising Federal Reserve (Fed) rates. The rates on 10-year Treasury bonds (US10Y) have decreased by almost 3.87%.

The recent drop in the US Treasury bond yield is due to the lack of additional evidence supporting the hawkish Fed concerns. Meanwhile, gold prices have experienced a recovery due to the falling US Treasury bond rates.

Focus on the Upcoming Personal Consumption Expenditures Price Index

Later in the day, all eyes are on the Personal Consumption Expenditures Price Index, which is the Federal Reserve's preferred measure of inflation. The Core PCE Price Index is expected to confirm that inflation remained high in January, with analysts predicting a 4.3% increase from the same time last year.

The Federal Reserve aims to combat inflation and has given few indications that it will continue to raise interest rates to achieve this goal. Additionally, higher yields increase the opportunity cost of holding non-yielding assets such as gold, which is unfavorable for the precious metal.

Gold (XAU/USD) Intraday Technical Levels

Support      Resistance

1816            1832

1809            1841

1800            1848

Pivot Point: 1825

Gold (XAU/USD) – Technical Outlook

Gold prices have slipped to the $1,820 support zone, as the downward channel and descending triangle pattern on the 4-hour timeframe continue to exert selling pressure.

If the $1,820 double-bottom pattern is broken, gold prices may fall to the $1,810 or $1,799 support zones. Although the RSI and MACD indicators are still in the selling zone, the MACD is forming smaller histograms, indicating a weaker selling bias. Additionally, the 50-day simple moving average is around $1,830, which may act as a resistance level to the upside.

Market participants are closely watching the Core PCE Price Index m/m and New Home Sales as strong US data figures usually weigh on gold prices.

Related:

    * USD/JPY Price Analysis – February 24, 2023