Contents
The Gold price (XAU/USD) grapples with maintaining momentum, hovering below the crucial $2,000 mark during the early European trading session. Despite minor gains, the price struggles to breach the psychological barrier, adding to cautious sentiments among bullish traders.
Key Highlights:
- Gold price struggles below $2,000, influenced by weaker dollar.
- Fed’s hawkish tone and upbeat US data impact gold market sentiment.
- Market anticipates steady Fed rates despite speculation of rate cuts in 2024.
- Weakness in equity markets supports safe-haven demand for gold.
- Gold eyes second consecutive weekly gain; near-term outlook mildly bullish.
Market Support and Resistance Levels
Support levels around $1,989-1,988, followed by $1,979-1,978 and $1,965, reinforce the current stance. Conversely, breaching the $2,000 mark might pave the way for further movement toward $2,007 and $2,009-2,010 levels, with $2,022 as a significant resistance point.
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Factors Influencing Gold Price Movement
Investor hesitancy prevails, primarily driven by uncertainties surrounding the Federal Reserve’s rate hike trajectory. The recent FOMC minutes adopted a hawkish tone, strengthening the US dollar and fueling speculation about prolonged high interest rates. This, coupled with elevated US Treasury bond yields, contributes to the headwinds for the non-yielding Gold commodity.
Balancing Forces in the Market
Amidst these trends, market players lean towards a steady rate stance from the US central bank, despite pricing in potential rate cuts in 2024. Thus, the ongoing USD recovery since August remains capped, supplemented by weak cues from equity markets that favor the safe-haven appeal of Gold, potentially limiting substantial downward movements.
Gold Price Short-Term Outlook
Despite prevailing uncertainties, Gold eyes a second consecutive weekly gain. Thus, largely influenced by a softer Dollar and cautious anticipation of the Fed’s moves. The metal’s immediate trajectory hinges on the impending US PMIs for potential market direction.
I
Gold’s current stability mirrors the evolving market sentiment regarding the Fed’s future actions. The metal’s price remains relatively steady around $2014.10, indicating a measured response amid Dollar fluctuations.
A
A softer Dollar, nearing another weekly decline, renders Gold more accessible to non-dollar buyers. Simultaneously, fluctuations in Treasury yields impact the precious metal’s upward potential.
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Forecast and Technical Analysis
Traders anticipate a stable rate stance by the Fed in December, potentially influencing Gold’s path. However, Short-term projections suggest a mildly bullish outlook as markets gauge possible dovish shifts from the Fed against mixed economic indicators.
Technically, Gold maintains positions above key moving averages, indicating a bullish medium-term trend. Current support levels around 1987.00 might steer the price towards 2009.00 and potentially 2067.00, contingent upon maintenance.
Gold Price Fundamental Analysis
Gold prices (XAU/USD) struggled below $2,000 amid uncertainty about the Fed’s rate plans. Investors refrained from big bets, seeking clarity on future rate hikes.
The recent FOMC minutes sounded hawkish, fueled by strong US labor and consumer data, indicating a longer period of high-interest rates. This, coupled with increased US Treasury bond yields, acted as a challenge for gold, which doesn’t yield interest.
Despite speculation of rate cuts in 2024, most believe the Fed will maintain current rates, capping the USD’s recovery. Therefore, Weak signals from stocks boosted demand for gold as a safe haven, curbing significant downward movement.
However, XAU/USD eyes a second straight weekly gain as attention turns to flash US PMIs for potential momentum.
