Gold seen holding its weekly gains from the previous two days.
During the Asian session on Thursday, the gold price (XAUUSD) fails to capitalize on its gains over the previous two days, oscillating in a narrow trading zone below the $2,040 mark. For the time being, the precious metal appears to have paused the post-FOMC rally near the 50-day Simple Moving Average (SMA) support and stays below a one-and-a-half-week high reached on Thursday. The short-term orientation, However, in the aftermath of the Federal Reserve’s (Fed) dovish swing, which pushes the US Dollar (USD) to a four-month low and should work as a tailwind for the non-yielding yellow metal.
Rebounding US bond yields and a positive risk tone weigh on the metal.
Nonetheless, the optimistic US macro data reported on Thursday cast doubt on the probability of the Fed cutting interest rates at its March meeting. This results in a minor recovery in US Treasury bond yields, which, together with the existing risk-on atmosphere, is seen as limiting the potential for the safe-haven Gold price. The Fed signaled the end of its monetary policy tightening cycle on Wednesday, boosting global risk sentiment significantly. Aside from that, Friday’s better-than-expected Chinese economic data Macro data continues to underpin the underlying bullish attitude in global equity markets, preventing bulls from placing new wagers on the XAUUSD.
Traders are now anticipating the publication of flash PMI prints from the Eurozone, the United Kingdom, and the United States for new insights into the global economy’s health. This would influence market risk sentiment and demand for the safe-haven precious metal. Nonetheless, the XAUUSD is on course to post small weekly gains, correcting some of last week’s decline from the all-time high.
Daily Digest Market Movers: On Friday, the gold price lacks a clear intraday direction.
The positive US macro statistics released on Thursday threw doubt on the Federal Reserve cutting interest rates soon, which provides some relief. increases US Treasury bond yields and works as a drag for the gold price in a risk-on environment.
The US Commerce Department stated that retail sales increased by 0.3% in November, compared to the previous month’s 0.2% decline (revised down from -0.1%) and the 0.1% decline predicted.
Furthermore, core Retail Sales, which exclude vehicles, outperformed consensus predictions of a 0.1% decline and grew 0.2% last month, while Retail Sales Control Group increased 0.4%.
Meanwhile, the US Labor Department announced. That the number of Americans claiming for unemployment benefits for the first time fell to 202K last week, the lowest level since mid-October.
Retail Sales in China increased 10.1% year on year in November. According to data released on Friday. Industrial Production grew 6.6% YoY, compared to a 4.6% growth in the preceding month.
Following the release of the high-impact data. The National Bureau of Statistics (NBS) stated. That China will not experience deflation as long as demand remains stable.
According to Reuters, citing three sources with knowledge of the topic. Chinese authorities agreed this week at an annual economic meeting to set the 2024 economic growth target at approximately 5.0%.
Markets continue to price in a nearly 60% possibility that the Fed would begin to lower rates at its March meeting.
Meanwhile, markets continue to price in a nearly 60% possibility. That the Fed would begin to lower rates at its March meeting, with a May rate drop being priced in at 90%.
This, combined with the widespread selling bias surrounding the The US dollar. Which is falling for the fourth day in a row and has reached a four-month low, is seen as supporting the commodity.
Moving forward, the release of flash global PMI prints on Friday may add some fuel to the precious metal. And allow traders to take advantage of short-term opportunities on the last day of the week.
