GOLD Price Analysis – Jan 29, 2024
Daily Price Outlook
Gold price (XAU/USD) prolonged its upward trend and remained well bid around the $2,026 level. However, the reason for its upward trend can be attributed to the escalating geopolitical tensions in the Middle East, which tend to underpin safe-haven assets, including gold. In the meantime, the sliding US bond yields were seen as another key factor that kept the gold price higher.
Moving on, traders seem hesitant to place any strong positions as they prefer to wait for more cues about the timing of when the Federal Reserve (Fed) will start cutting interest rates. Therefore, the investor's focus will be on the outcome of the highly-anticipated two-day FOMC monetary policy meeting starting on Tuesday.
Escalating Tensions in the Middle East: Impact on Investor Sentiment and Gold Prices
The global market sentiment has been flashing red as three US Army soldiers were killed in a drone attack by Iran-backed militant groups, stirring concerns about heightened tensions in the Middle East. The incident occurred in Jordan, marking the first US service personnel deaths since the Hamas-Israel war began on October 7. President Joe Biden has affirmed the commitment to retaliate, vowing to hold those responsible to account. However, this situation is impacting investor sentiment, leading to increased support for the safe-haven Gold price at the start of the week.
Therefore, the news of three US Army soldiers killed in a drone attack by Iran-backed militants heightened concerns, impacting investor sentiment and leading to increased support for the safe-haven Gold price.
Cautious Sentiment and Fed Outlook Impacting Gold and USD
In contrast to this, the probability of the Federal Reserve implementing aggressive policy measures eased, seen as a key factor giving a boost to the US Dollar (USD) and capping further gains in the gold price. It should be noted that the broad-based US dollar is holding steady near a one-month high, reflecting investors' adjusted expectations for a more gradual Fed easing. Recent data reveals a modest increase in December inflation, aligning with expectations of Fed interest rate cuts by mid-2024. Despite some economic indicators signaling strength, lower US Treasury bond yields are capping further USD gains, favoring Gold.
GOLD (XAU/USD) - Technical Analysis
Gold's technical landscape on January 26 exhibits a tempered advance, with the metal trading at $2,022.105, marking a modest 0.06% gain. Positioned just above a pivot point at $2,002.57, gold's immediate trajectory is clouded with a balanced mix of caution and opportunism. Resistance levels loom overhead, with $2,031.38 as the nearest hurdle, followed by $2,057.88 and $2,087.83, each potentially capping upward surges.
Conversely, supports at $1,973.77, $1,944.96, and $1,916.15 stand as bulwarks against a decline, ready to catch falling prices. The RSI, neutral at 49, and the MACD, with a mainline at 0.04 above its signal, provide no clear directional bias, underscoring a market in equilibrium.
A symmetrical triangle pattern hints at consolidation, suggesting that gold prices are coiling for a breakout that could define the next significant move. In the interim, the strategy points to a cautious buy stop at $2,027, targeting profits at $2,040, and safeguarding with a stop loss at $2,016. The immediate forecast contemplates a challenge to the resistance at $2,031.38, with a close eye on supportive floors that may come into play on any potential pullback.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold is trading slightly higher at $2,022.105, up 0.06%.
- The pivot point at $2,002.57 serves as a key juncture, with resistance levels ascending from $2,031.38 to $2,087.83 and support steps descending to $1,916.15.
- Current indicators and chart patterns suggest a neutral to slightly bullish bias, with a short-term forecast eyeing resistance tests while mindful of support levels.
Gold's technical landscape on January 26 exhibits a tempered advance, with the metal trading at $2,022.105, marking a modest 0.06% gain. Positioned just above a pivot point at $2,002.57, gold's immediate trajectory is clouded with a balanced mix of caution and opportunism. Resistance levels loom overhead, with $2,031.38 as the nearest hurdle, followed by $2,057.88 and $2,087.83, each potentially capping upward surges.
Conversely, supports at $1,973.77, $1,944.96, and $1,916.15 stand as bulwarks against a decline, ready to catch falling prices. The RSI, neutral at 49, and the MACD, with a mainline at 0.04 above its signal, provide no clear directional bias, underscoring a market in equilibrium.
A symmetrical triangle pattern hints at consolidation, suggesting that gold prices are coiling for a breakout that could define the next significant move. In the interim, the strategy points to a cautious buy stop at $2,027, targeting profits at $2,040, and safeguarding with a stop loss at $2,016. The immediate forecast contemplates a challenge to the resistance at $2,031.38, with a close eye on supportive floors that may come into play on any potential pullback.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Stop 2027
Take Profit – 2040
Stop Loss – 2016
Risk to Reward – 1: 1.18
Profit & Loss Per Standard Lot = +$1300/ -$1100
Profit & Loss Per Mini Lot = +$130/ -$110
GOLD Price Analysis – Jan 26, 2024
Daily Price Outlook
Gold price (XAU/USD) failed to stop its previous session's downward trend and remained bearish around the 2,020 level. However, the reason for its downward trend can be attributed to lowered bets for an early interest rate cut by the Fed, which exerted downward pressure on gold. In contrast to this, ongoing geopolitical risks and the uncertain global economic outlook were seen as key factors that help gold price limit its losses. Gold is set to face a second week of losses, with attention turning to the FOMC meeting on January 30-31.
Fed Rate Cut Expectations, Economic Strength, and Gold Pressures
It's important to highlight that market expectations for the Fed's first interest rate cut have shifted from March to May, which is impacting Gold price. However. this shift is influenced by positive US economic data, allowing the Federal Reserve to keep interest rates higher for a bit longer. Notably, the recent data indicates robust 3.3% annual growth in the US economy during Q4 2023, surpassing the estimated 2.0%. In the meantime, the core PCE Price Index, a measure of inflation, remained unchanged, suggesting a decrease in inflationary pressures.
Hence, this reinforces the belief that the US economy is likely to avoid a recession, overshadowing a slight increase in US Weekly Initial Jobless Claims to 214K. Moreover, the US Census Bureau reported that Durable Goods Orders were flat in December, with new orders (excluding transportation and defense) increasing by 0.3%.
Despite the drop in the 10-year US Treasury yield, the US Dollar continues to strengthen, driven by positive US economic data. This dynamic is putting pressure on Gold. The current market outlook suggests a delayed rate cut in May, in contrast to the earlier expectation for a cut in March. However, the geopolitical risks and the ongoing global economic uncertainty are expected to help safe-haven gold prices to limit its losses.
Global Concerns and Gold Outlook Amid Middle East Tensions
At the geopolitical front, Investors are worried that the conflict between Israel and Hamas might turn into a bigger regional war, involving multiple nations and groups. This concern is heightened by predictions of a global economic slowdown in 2024. As a result, people are turning to precious metals like gold as a safe investment. It should be noted that tensions are rising as the US carries out military strikes on Iranian-affiliated groups in Iraq, increasing the risk of further escalation in the Middle East.
Traders are closely watching the US Personal Consumption Expenditures Price Index for hints about the Federal Reserve's future decisions. These indicators will influence expectations for Fed policies, impacting the demand for the US dollar and determining the short-term direction of the safe-haven XAU/USD.
GOLD (XAU/USD) - Technical Analysis
Gold's technical landscape on January 26 exhibits a tempered advance, with the metal trading at $2,022.105, marking a modest 0.06% gain. Positioned just above a pivot point at $2,002.57, gold's immediate trajectory is clouded with a balanced mix of caution and opportunism. Resistance levels loom overhead, with $2,031.38 as the nearest hurdle, followed by $2,057.88 and $2,087.83, each potentially capping upward surges.
Conversely, supports at $1,973.77, $1,944.96, and $1,916.15 stand as bulwarks against a decline, ready to catch falling prices. The RSI, neutral at 49, and the MACD, with a mainline at 0.04 above its signal, provide no clear directional bias, underscoring a market in equilibrium.
A symmetrical triangle pattern hints at consolidation, suggesting that gold prices are coiling for a breakout that could define the next significant move. In the interim, the strategy points to a cautious buy stop at $2,027, targeting profits at $2,040, and safeguarding with a stop loss at $2,016. The immediate forecast contemplates a challenge to the resistance at $2,031.38, with a close eye on supportive floors that may come into play on any potential pullback.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold edges up to $2,015.81; pivot at $2,002 signals indecision.
- RSI at 41, MACD below signal line suggest possible downtrend.
- Key resistances: $2,029, $2,058; supports at $1,973, $1,944.
Gold maintains a subtle ascent, now at $2,015.81, up by a marginal 0.07% for the day. The precious metal's pivot point stands at $2,002, a pivotal green line on the chart suggesting a balanced technical fulcrum.
Resistance levels are mapped out above this line, with the first at $2,029, the second at $2,058, and a third at a more distant $2,087. Support, conversely, is established at $1,973, with additional levels at $1,944 and $1,917.
The Relative Strength Index (RSI) is currently at 41, hinting at neither overbought nor oversold conditions. The Moving Average Convergence Divergence (MACD) shows a value of -1.163 with the signal at -1.978, indicating potential downward momentum as the MACD line remains below the signal line.
The 50-Day Exponential Moving Average (EMA) is calculated at $2,021.15, providing a dynamic level that could act as resistance in the near term.
In conclusion, with gold trading just below the 50 EMA and indicators suggesting a negative tilt, the trend is cautiously bearish. Traders might consider a sell position below $2,019, with a take profit at $2,006, and a stop loss set at $2,030 to manage risk.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Sell Below 2019
Take Profit – 2006
Stop Loss – 2030
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$1300/ -$1100
Profit & Loss Per Mini Lot = +$130/ -$110
GOLD Price Analysis – Jan 25, 2024
Daily Price Outlook
Gold price (XAU/USD) extended its winning streak and gained further momentum around the $2,015 level. The bullish bias can be attributed to ongoing geopolitical tensions arising from conflicts in the Middle East, providing support to the safe-haven gold price. In addition, the US Dollar (USD) failed to extend its overnight bounce and continues to stay below its highest level since December 13, which was reached on Tuesday. Therefore, the sluggish US dollar is considered another key factor contributing to the higher gold price.
Positive US PMI Data Dampens Gold Appeal Amid Reduced Fed Rate Cut Expectations
It is important to highlight that the recent positive release of the flash US PMI suggests a strong economy, causing investors to reconsider the possibility of an early interest rate cut by the Federal Reserve. This has resulted in higher US Treasury bond yields, making gold less attractive. The upbeat data, including a 15-month high in Manufacturing PMI and a resilient services sector, indicates a robust US economy, reducing expectations of aggressive Fed policy easing in 2024.
Therefore, the strong US economic data, featuring higher PMI and reduced expectations of a Fed rate cut, has pushed up Treasury yields, dampening gold's appeal as a non-yielding asset.
Geopolitical Tensions in the Middle East Boost Gold's Safe-Haven Appeal
Moreover, Gold prices are rising due to tensions in the Middle East. Recently, Iran-backed Houthi rebels targeted two US-owned ships near the Gulf of Aden. In response, the US military conducted pre-emptive strikes, citing a threat to shipping lanes in the Red Sea. This has increased gold's appeal as a safe-haven asset, as investors turn to it for security amid uncertainties. The ongoing conflict in the region is adding to concerns and pushing up gold prices.
Therefore, the geopolitical tensions in the Middle East, especially the Houthi attacks and the US military response, heighten gold's appeal as a safe-haven asset. This uncertainty drives up demand, leading to a rise in gold prices.
Market Caution Ahead of ECB Meeting and US Economic Reports
Looking forward, the upcoming European Central Bank meeting and the Advance US Q4 GDP report will be in spotlight. Besides this, attention is also on the US Personal Consumption Expenditures Price Index, Durable Goods Orders, and Weekly Initial Jobless Claims, which could influence the US Dollar and gold prices.
GOLD (XAU/USD) - Technical Analysis
Gold maintains a subtle ascent, now at $2,015.81, up by a marginal 0.07% for the day. The precious metal's pivot point stands at $2,002, a pivotal green line on the chart suggesting a balanced technical fulcrum.
Resistance levels are mapped out above this line, with the first at $2,029, the second at $2,058, and a third at a more distant $2,087. Support, conversely, is established at $1,973, with additional levels at $1,944 and $1,917.
The Relative Strength Index (RSI) is currently at 41, hinting at neither overbought nor oversold conditions. The Moving Average Convergence Divergence (MACD) shows a value of -1.163 with the signal at -1.978, indicating potential downward momentum as the MACD line remains below the signal line.
The 50-Day Exponential Moving Average (EMA) is calculated at $2,021.15, providing a dynamic level that could act as resistance in the near term.
In conclusion, with gold trading just below the 50 EMA and indicators suggesting a negative tilt, the trend is cautiously bearish. Traders might consider a sell position below $2,019, with a take profit at $2,006, and a stop loss set at $2,030 to manage risk.
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GOLD Price Analysis – Jan 24, 2024
Daily Price Outlook
Gold price (XAU/USD) failed to extend its previous day gaining streak and turned bearish around 2,028 level. However, the reason for its downward trend can be attributed to the lowered bets for an early interest rate cut by the Federal Reserve (Fed), which put some bearish pressure on the gold price. In contrast to this, the ongoing geopolitical risks and the uncertain global economic outlook was seen as a key factor that help gold price to limit its losses.
Moving on, traders seem hesitate to place strong bets as they are awaiting for more cues about the timing of when the Federal Reserve (Fed) will start cutting interest rates. Hence, the traders eyes will be on this week's important US macro releases, beginning with the flash PMIs later today. The focus will then shift to the Advance Q4 GDP print on Thursday and the Core PCE Price Index on Friday. These releases are expected to significantly impact market dynamics, making them crucial points of analysis for traders.
Fed's Rate Cut Expectations Shift to May, Impacting Gold Prices
It's worth noting that market expectations for the Fed's first interest rate cut have shifted from March to May, which has been impacting the Gold price. However, this change is due to positive US economic data, giving the Federal Reserve room to maintain higher interest rates for a bit longer.
Despite a pullback in US Treasury bond yields, the US Dollar remains strong, which was seen as another key factor that putting pressure on Gold. Notably, the current market outlook suggests a delayed rate cut in May, as opposed to the earlier expectation for March.
Therefore, the shift in Fed's rate cut expectations from March to May, influenced by positive US economic data, has pressured Gold. However, geopolitical risks and economic uncertainty are expected to limit golds deeper losses.
Gold Prices React to US Military Strikes and Economic Data Anticipation
Furthermore, US military strikes on Iranian-affiliated groups in Iraq raise tensions, increasing the risk of further Middle East escalation. As we mentioned above, traders feel cautious about global uncertainties and ongoing conflicts, await key US economic data this week. This includes flash PMIs, Q4 GDP, and Core PCE, crucial for shaping Fed policy expectations. Such economic indicators will influence USD demand and determine the near-term direction for safe-haven XAU/USD.
Hence, the US military strikes in Iraq raise tension, posing a risk of further Middle East escalation. Despite this, cautious traders await key US economic data, which will influence gold prices amid ongoing global uncertainties.
GOLD (XAU/USD) - Technical Analysis
On January 24, gold's pricing maneuvers reveal a slight retreat, with the precious metal trading at $2025.01, marking a 0.23% decline. This subtle downtick aligns with a broader hesitation seen across commodities. Gold is currently wrestling with its pivot point set firmly at $2,001, which serves as a tentative fulcrum for any directional moves.
Overhead, the immediate resistance level stands at $2,031, with further ceilings awaiting at $2,058 and $2,088. These levels are crucial for gold to breach if it is to sustain a bullish stance. Conversely, the supports form a safety net at $1,972, $1,945, and closely watched $1,916, guarding against deeper price dips.
The Relative Strength Index (RSI) hovers around the neutral 49 mark, suggesting an equilibrium between buying and selling pressures. The MACD indicator exhibits a minor divergence of -0.093 below the signal line, implying potential downward momentum. Moreover, the proximity of the current price to the 50-Day Exponential Moving Average (EMA) of $2,026 could signal a pivotal phase for the metal.
In summary, while the current trend exhibits a neutral to slightly bearish bias, strategic entry points are advised for bullish traders above $2,022, with a take-profit target at $2,038 and a stop-loss consideration around $2,012. The forecast anticipates gold to possibly challenge the resistance at $2,031 in the short term, with market participants watching for a conclusive break to validate the next trend.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold slips to $2025.01, grappling with key pivot at $2,001 amid mixed market signals.
- Resistance levels loom at $2,031 and $2,058; RSI and MACD hint at a standoff.
- A strategic approach suggests buying above $2,022, eyeing resistance tests and trend confirmation.
On January 24, gold's pricing maneuvers reveal a slight retreat, with the precious metal trading at $2025.01, marking a 0.23% decline. This subtle downtick aligns with a broader hesitation seen across commodities. Gold is currently wrestling with its pivot point set firmly at $2,001, which serves as a tentative fulcrum for any directional moves.
Overhead, the immediate resistance level stands at $2,031, with further ceilings awaiting at $2,058 and $2,088. These levels are crucial for gold to breach if it is to sustain a bullish stance. Conversely, the supports form a safety net at $1,972, $1,945, and closely watched $1,916, guarding against deeper price dips.
The Relative Strength Index (RSI) hovers around the neutral 49 mark, suggesting an equilibrium between buying and selling pressures. The MACD indicator exhibits a minor divergence of -0.093 below the signal line, implying potential downward momentum. Moreover, the proximity of the current price to the 50-Day Exponential Moving Average (EMA) of $2,026 could signal a pivotal phase for the metal.
In summary, while the current trend exhibits a neutral to slightly bearish bias, strategic entry points are advised for bullish traders above $2,022, with a take-profit target at $2,038 and a stop-loss consideration around $2,012. The forecast anticipates gold to possibly challenge the resistance at $2,031 in the short term, with market participants watching for a conclusive break to validate the next trend.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2022
Take Profit – 2038
Stop Loss – 2012
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$1600/ -$1000
Profit & Loss Per Mini Lot = +$160/ -$100
GOLD Price Analysis – Jan 23, 2024
Daily Price Outlook
Gold price (XAU/USD) maintained its upwrd stance and remained well bid around above 2,030 level. However, the reason for its upward trend can be attributed to the geopolitical risks and china’s economic woes, which lend some support to the safe-haven XAU/USD. Investors are lowering their hopes for the Federal Reserve to aggressively cut interest rates, as recent signs suggest the economy is doing well.
The market now sees a 40% chance of a rate cut in March, down from 80% a week ago. Hence, the reduced expectations of aggressive rate cuts was seen as a key factor that kept the lid on any additional gains in the gold price.
Reduced Rate Cut Expectations Impact Gold Prices
Investors are adjusting their expectations for the Federal Reserve to reduce interest rates aggressively. This shift is driven by recent positive economic data and statements from Fed officials indicating continued economic strength. Strong US macro indicators are contributing to higher Treasury bond yields, which, in turn, are limiting gains in gold prices.
Traders are exercising caution ahead of key economic releases this week. Notably, the probability of a rate cut in March has decreased from 80% to 40%. The 10-year US bond yield is close to its December peak, supporting the US Dollar and restraining gold (XAU/USD).
Therefore, the reduced probability of aggressive interest rate cuts and higher US Treasury yields limit gold price gains. The resilient economy and strong dollar act as headwinds for gold (XAU/USD).
Geopolitical Tensions Drive Surge in Gold Prices
Moreover, ongoing concerns about increasing tensions in the Middle East and economic challenges in China are boosting the appeal of safe-haven assets, leading to a positive shift in gold prices on Tuesday. The US and UK recently conducted joint air strikes against Iran-backed Houthis in Yemen, with the aim of safeguarding ships in the Red Sea. Diplomacy is underway between Pakistan and Iran, but the Israel-Hamas conflict poses a risk of escalating into a larger-scale war, potentially having global economic repercussions. These geopolitical developments are influencing the upward movement in gold prices as investors seek refuge amid uncertainty.
Therefore, the rising Middle East tensions and economic challenges in China are driving investors to seek safety in Gold. Geopolitical events, like joint airstrikes and conflicts, contribute to a positive shift in Gold prices.
Meanwhile, the upcoming European Central Bank (ECB) policy decision on Thursday could add some excitement to the markets, offering short-term trading chances for gold. Moving on, the release of the Richmond Manufacturing Index along with US bond yields, USD price movements, and overall risk sentiment, could provide some market momentum.
GOLD (XAU/USD) - Technical Analysis
Gold's allure strengthens modestly in today's trading, with prices edging up 0.36% to $2028.31, reflecting a mild positive sentiment among investors. The precious metal finds itself navigating around a pivot point of $2,031, suggesting a pivotal moment for its immediate trajectory. Key resistance levels at $2,058, $2,088, and $2,116 form a series of challenges ahead, while support at $2,001 and lower at $1,973 and $1,945 offers a cushion should gold's ascent falter.
Technical indicators lend a nuanced view: the Relative Strength Index (RSI) at 53 hints at a balanced momentum, neither overbought nor oversold. The Moving Average Convergence Divergence (MACD) presents a positive crossover, with its value at 0.70600 above the signal at -1.152, typically a bullish sign. The 50-day EMA at $2,024.27 underscores this optimism, aligning closely with current levels.
From a chartist's perspective, no distinct pattern prevails, leaving the next movement somewhat ambiguous. However, the technicals lean towards a cautiously optimistic forecast, suggesting potential for an upward push. Traders might consider entry above $2023, targeting $2040, while maintaining a stop loss at $2010 to protect against any unexpected downturns.
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GOLD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Gold inches higher, testing pivot; RSI balanced, MACD hints at bullishness.
- Immediate resistances and supports charted; 50-day EMA aligns with current price.
- Potential bullish trend suggested; advisable entries and exits delineated.
Gold's allure strengthens modestly in today's trading, with prices edging up 0.36% to $2028.31, reflecting a mild positive sentiment among investors. The precious metal finds itself navigating around a pivot point of $2,031, suggesting a pivotal moment for its immediate trajectory. Key resistance levels at $2,058, $2,088, and $2,116 form a series of challenges ahead, while support at $2,001 and lower at $1,973 and $1,945 offers a cushion should gold's ascent falter.
Technical indicators lend a nuanced view: the Relative Strength Index (RSI) at 53 hints at a balanced momentum, neither overbought nor oversold. The Moving Average Convergence Divergence (MACD) presents a positive crossover, with its value at 0.70600 above the signal at -1.152, typically a bullish sign. The 50-day EMA at $2,024.27 underscores this optimism, aligning closely with current levels.
From a chartist's perspective, no distinct pattern prevails, leaving the next movement somewhat ambiguous. However, the technicals lean towards a cautiously optimistic forecast, suggesting potential for an upward push. Traders might consider entry above $2023, targeting $2040, while maintaining a stop loss at $2010 to protect against any unexpected downturns.
GOLD (XAU/USD) - Trade Ideas
Entry Price – Buy Above 2023
Take Profit – 2040
Stop Loss – 2010
Risk to Reward– 1: 1.3
Profit & Loss Per Standard Lot = +$1700/ -$1300
Profit & Loss Per Mini Lot = +$170/ -$130
GOLD Price Analysis – Jan 22, 2024
Daily Price Outlook
Gold prices (XAU/USD) failed to extend their previous bullish rally and lost some momentum around the $2,020 level. Gold started this new week on a weaker note as it dropped to the $2,020.99 level. However, the reason for its downward trend can be attributed to the recent hawkish comments from a Federal Reserve (Fed) policymakers, which diminish market expectations of an early rate cut.
This was seen as a key factor driving flows away from the non-yielding yellow metal. Furthermore, incoming US macro data, including Friday's upbeat consumer sentiment index, indicates that the economy is performing well. This has diminished market expectations of an early rate cut and is a contributing factor to the declines in gold prices.
In addition to this, a risk-on sentiment in the market was seen as another key factor that undermined the gold price. In contrast to this, the concerns about increasing tensions in the Middle East and ongoing worries about economic slowdown in China could offer some support to the safe-haven XAU/USD. Moreover, the lower US Treasury bond yields, which keeps the US Dollar (USD) bulls on the defensive, should help limit any further losses for the precious metal.
Gold Prices Slide Amid Diminished Expectations for Federal Reserve Rate Cut
It's important to mention that Gold prices lost momentum at the beginning of the week due to a decreased likelihood of the Federal Reserve cutting interest rates soon. Investors are feeling optimistic, and recent positive US economic data and comments from Fed officials made them less inclined to expect an early rate cut. The University of Michigan's survey indicated improved consumer sentiment, reaching its highest level since July 2021.
Traders now see less than a 50% chance of a rate cut in March, down from over 70% last week. Chicago Fed President Goolsbee emphasized the need for more inflation data, and San Francisco Fed President Daly cautioned that rate cuts aren't imminent.
Therefore, the reduced chance of a Federal Reserve rate cut, driven by positive economic data and officials' comments, caused Gold prices to decline. Improved investor sentiment and lower expectations for rate cuts led to the drop.
Escalating Geopolitical Tensions Spark Interest in Gold as a Safe-Haven Asset
Furthermore, the US launched its seventh attack on Houthi rebels in response to their anti-ship missile strikes in the Red Sea. Over 140 attacks on US bases have occurred since October 17, with seven in the past week, including a significant strike in Iraq. Iran, blaming Israel, vows retaliation for an attack in Damascus that killed five military officials.
Israeli forces clashed with Hamas in several places, and airstrikes resumed in the southern Gaza Strip. Israeli Prime Minister Netanyahu rejected a two-state solution, asserting Israel's need for security control over the entire territory west of the Jordan River.
Therefore, the increased geopolitical tensions, marked by US actions, Middle East clashes, and Iran-Israel tensions, can boost gold prices as investors often turn to gold as a safe-haven asset during uncertain and volatile times.
GOLD (XAU/USD) - Technical Analysis
Gold's market behavior on January 22 presents a slight contraction, with a 0.12% decrement, stabilizing at $2027.16. In the tapestry of global economic uncertainties, the precious metal finds itself in a tug-of-war between bearish pullbacks and the enduring allure of its safe-haven status.
Within the technical realm, Gold has etched a pivot point at $2,003, a strategic nexus that could determine its short-term fate. Resistance is arrayed at $2,030, with subsequent barriers at $2,059 and $2,089, each level a potential catalyst for further bullish excursions or a turning point for retracement. Supports are anchored at $1,975, $1,943, and $1,916, which may serve as bulwarks against deeper price dips.
The RSI rests at an equilibrium of 50, signifying a market in balance, with neither overbought nor oversold conditions evident. The MACD indicator signals a robust divergence (2.01) from its signal (-0.91), suggesting latent bullish tendencies may be gathering momentum beneath the surface.
Gold's 50-day EMA aligns closely with its current price, echoing the pivot point's critical significance. This confluence may act as a springboard for upward movements or a demarcation line for bearish reversals.
Conclusively, while the current trend hints at neutrality, the proximity of Gold's price to key technical thresholds suggests a potential for volatility. Traders considering entry may favor a sell position below the immediate resistance of $2,030, eyeing a take-profit mark at $2,015, and a stop loss at $2,040 to mitigate risk exposure.
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