Gold trading with moderate intraday gains, but there is no follow-through purchasing.
The gold price (XAUUSD) rises during the Asian session on Thursday. But there is little follow-through and it remains below the $2,000 psychological level. A generally positive risk tone is viewed as a crucial factor acting. As a headwind for gold. The commodity on the other hand, manages to maintain above a one-week low, around the $1,970-1,969 region. Touched the day before, indicating caution for aggressive negative traders.
Treasury bond yields in the United States. And The US Dollar (USD) continues to fall as investors anticipate. That the Federal Reserve (Fed) will stop boosting interest rates. This, in turn, is perceived as providing some support to the price of non-yielding gold.
Geopolitical concerns and China’s economic troubles should restrict the XAUUSD’s decline.
The potential of additional escalation in the Israel-Hamas conflict. As well as worsening Chinese economic conditions, should restrict any major decline in the safe-haven XAUUSD.
Daily Digest Market Movers: Gold price attracts buyers as US bond yields and the USD fall post-FOMC.
The gold price is struggling to capitalize on its slight intraday rise in the face of a risk-on climate. And uncertainty about the Federal Reserve’s potential rate-hike path.
The Fed chose to maintain the key overnight interest rates unchanged for the remainder of the year. Second time in a straight, and emphasized. That financial conditions may already be tight enough to keep inflation under check.
Markets now expect the US central bank to begin cutting rates in June 2024, resulting in a further significant decrease in US Treasury bond yields and a weakening of the US dollar.
The yield on the rate-sensitive two-year US government bond has dropped to its lowest level since September 8, while the benchmark 10-year Treasury yield has moved further from the 5% mark.
The Fed raised its assessment of economic activity and praised the US economy’s surprise resiliency, implying that another rate hike is still on the table.
On the geopolitical front, Bolivia severed diplomatic ties with Israel in response to civilian casualties caused by what It criticizes the Israeli action in Gaza as forceful and disproportionate.
The market’s attention is now shifting to the US monthly employment figures – the NFP report – which are out on Friday and should provide some substantial push to the precious metal.
Technical Outlook
Gold must find acceptance over the $2,000 psychological level for bulls to reclaim control.
Technically, the $2,000 figure is expected to operate as an instant significant barrier. This is followed by a multi-month top near $2,008-2,010, which, if strongly crossed, has the ability to raise the Gold price to the next key barrier near $2,022. On the other hand, the overnight swing low. Around $1,970, appears to be providing some support to the XAUUSD. Before the commodity drops to the $1,954-1,953 zone, some follow-through selling will expose the $1,964 intermediate support.
