gold(XAUUSD) price is fluctuating within a small range as traders anticipate this week’s big central bank meetings.
The gold(XAUUSD) price begins the new week on a sour note, oscillating in a narrow trading zone throughout the Asian session. Meanwhile, the XAUUSD remains well within striking distance of a nine-month high reached last Thursday.
Bets on smaller Fed rate hikes keep USD bulls on the defensive and provide support .
As investors remain cautious ahead of the Federal Reserve’s (Fed) rate-hike decision later this week. The Fed will publish its policy decision at the end of a two-day meeting on Wednesday.Interest rates are projected to rise by only 25 basis points. This would further slow the rate-hike cycle, keeping US Dollar bulls on the defensive and acting as a tailwind for the non-yielding gold price.
The Fed’s chances for less aggressive policy tightening were confirmed. by the release of the US Personal Consumption Expenditures (PCE) statistics on Friday. The Core PCE Price Index, the Fed’s favored inflation indicator, fell to 4.4% YoY in December from 4.7% the previous month, adding to signals of lessening inflationary pressure.
gold Technical situation favors bullish trade and suggests that the price will rise further in the short future.
gold price has shown some tenacity below the 200-hour SMA and continues to draw some buyers in the $1,920-$1,915 range. The latter should now serve as a critical point, protecting the immediate downside. A decisive break below might push the XAUUSD back towards the $1,900 level.
Some follow-through selling might tip the scales in favor of pessimistic traders and pave the way for a deeper corrective retreat. On the other hand, the multi-month high at $1,949 has suddenly become an immediate strong barrier.
Gold’s price might rise to the $1,969-$1,970 range if it maintains its current strength. The trend might be prolonged further, allowing the XAUUSD bulls to outperform. an intermediate barrier at $1,980 in the direction of recovering the $2,000 psychological threshold for the first time since March 2022.
