Gold price is limited within a small trading zone.
The gold price (XAUUSD) rose modestly on Thursday amid a lower US Dollar (USD). But lacked follow-through purchasing and stayed below the $2,000 psychological level heading into Friday’s European session.
Despite indicators that inflationary pressures are lessening. The FOMC minutes released on Tuesday were more hawkish. Furthermore, Wednesday’s positive US labor market. And consumer mood data may allow the Federal Reserve will maintain interest rates higher for a longer period of time. This, together with a slight increase in US Treasury bond yields. Proves to be a significant element acting. As a tailwind for the non-yielding Gold price on the final day of the week.
The Fed rate uncertainty and a milder risk tone help the precious metal.
The markets, on the other hand, appear certain that the Fed will hold rates stable rather than raise them. As a result, the US Dollar (USD) is unable to attract major purchasing and profit on this week’s goodish comeback from its lowest level since August 31. Aside from that, a general weakening tone in the equity markets is perceived as supporting the safe-haven Gold price. Nonetheless, the XAUUSD is on track to post its second weekly increase in a row as traders aim to For some impetus, show US PMIs.
Gold price fails to gain considerable impetus amid contradictory Fed indications.
A confluence of opposing forces fails to provide any impetus to the Gold price, resulting in subdued/range-bound price action throughout Friday’s Asian session.
The gap between the Federal Reserve’s hawkish view and market expectations for rate cuts in 2024 is preventing traders from placing directional bets on the XAU/USD.
The FOMC meeting minutes, issued on Tuesday, revealed that policymakers supported the case for keeping interest rates higher for longer in order to keep inflation under control.
Following the release of the October inflation report, bets on a December rate hike fell to zero. Furthermore, the markets are pricing over a There is a 25% likelihood of a rate cut as soon as March 2024.
Wednesday’s positive US labor market and consumer confidence statistics, together with rising US Treasury bond yields, strengthen the USD and limit precious metal gains.
Meanwhile, dovish Fed forecasts merit some caution for USD bulls and may continue to give some support to the commodity ahead of the November flash US PMI prints.
Technical Outlook
The gold price may continue to draw new buyers at the $2,010 strong barrier.
So far, the gold price has struggled to break beyond the $2,000 psychological barrier. This is on top of the recent string of failures ahead of the $2,010 mark, or a multi-month high reached in October. And it calls for caution. for traders who are bullish. However, oscillators on the daily chart are comfortably in positive territory. Indicating the possibility of some dip-buying near $1,989-1,988.
This is followed by support between $1,979-1,978 and the weekly low. Which is around $1,965. A convincing break below the latter might expose the 200-day Simple Moving Average (SMA). Which is now at $1,940, and the $1,933-1,932 confluence, which includes the 50- and 100-day SMAs.
On the other hand, the $2,000 level may continue to operate. As an immediate barrier ahead of the $2,007 and $2,009-2,010 ranges. Some follow-through buying will be viewed as a new trigger for bullish traders. Allowing the Gold price to accelerate its upward trend even higher. $2,022 resistance on the way to the next relevant hurdle near $2,040.
