Gold Price Analysis: XAU/USD pulls back from $2,070 as markets hunker down for holidays


  • Gold pulls back after testing $2,070 ahead of Friday’s pre-holiday close.
  • Rising investor bets of faster, more frequent Fed rate cuts squeeze Gold higher.
  • US inflation continues to cool off, Treasuries ease back amidst risk appetite recovery.

XAU/USD briefly tested above $2,070 on Friday before paring back toward the day’s opening bids. With the Federal Reserve’s (Fed) main interest rate at a 22-year high, markets are incredibly eager for the Fed to begin cutting interest rates, and receding US inflation is pinning investor hopes of an accelerated pace of Fed rate cuts in 2024.

The US Annualized Core Personal Consumption Expenditures (PCE) Price Index in November grew by 3.2% from the same time last year, easing back from market forecasts of 3.3% and declining further from the previous period’s 3.4% (which was also revised down from 3.5%).

Read More: US PCE inflation softens to 2.6% from a year ago vs. 2.8% expected

With US inflation easing back, markets are applying downside pressure to the US Dollar and bidding up Spot Gold in anticipation of Fed rate cuts that may have run too far ahead of what the Fed will be willing to execute; the Fed’s dot plot of interest rate expectations show a median forecast of 75 basis points in rate cuts through the end of 2024. By comparison, markets are currently pricing in bets of 160 basis points in cumulative rate cuts, with some particularly over-eager market participants betting on a rate cut as soon as next March.

With markets wrapping up the last full trading week of 2023 and gearing up for the holiday market break, Friday’s early action saw a notable reversal as the US Dollar pared back the day’s losses and Gold retreated back towards the day’s opening bids.

XAU/USD Technical Outlook

Spot Gold climbed over 1.10% bottom-to-top on Friday in a last-minute bull run before hitting the wall at $2,070 and reversing back toward Friday’s open near $2,050. 

Intraday action in the XAU/USD has been incredibly well-bid as of late, outpacing the 200-hour Simple Moving Average (SMA) since breaking to the topside of the moving average last week near $2,020.

A higher-lows pattern has baked into the XAU/USD on daily candles since Spot Gold bottomed out near $1,820 in early October, and long-term technical support is coming from the 200-day SMA rising into $1,960.

December’s early rally into all-time highs has left near-term Gold bids stranded in bull country, and XAU/USD will have to fall back below the $2,000 major handle before bearish patterns can begin to develop.

XAU/USD Hourly Chart

XAU/USD Daily Chart

XAU/USD Technical Levels

XAU/USD

Overview
Today last price 2053.23
Today Daily Change 9.05
Today Daily Change % 0.44
Today daily open 2044.18
 
Trends
Daily SMA20 2024.72
Daily SMA50 1992.17
Daily SMA100 1946.88
Daily SMA200 1957.87
 
Levels
Previous Daily High 2046.09
Previous Daily Low 2027.56
Previous Weekly High 2047.93
Previous Weekly Low 1973.13
Previous Monthly High 2052.03
Previous Monthly Low 1931.67
Daily Fibonacci 38.2% 2039.01
Daily Fibonacci 61.8% 2034.64
Daily Pivot Point S1 2032.46
Daily Pivot Point S2 2020.75
Daily Pivot Point S3 2013.93
Daily Pivot Point R1 2050.99
Daily Pivot Point R2 2057.81
Daily Pivot Point R3 2069.52

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD drops to two-year lows below 1.0450 after weak PMI data

EUR/USD drops to two-year lows below 1.0450 after weak PMI data

EUR/USD stays under bearish pressure and trades at its weakest level in nearly two years below 1.0450. The data from Germany and the Eurozone showed that the business activity in the private sector contracted in early November, weighing on the Euro.

EUR/USD News
GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD falls to six-month lows below 1.2600, eyes on key data releases

GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2600. This downside is attributed to the stronger US Dollar (USD) as traders continue to evaluate the Fed's policy outlook following latest data releases and Fedspeak.

GBP/USD News
Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark

Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark

Gold price hits a fresh two-week top during the first half of the European session on Friday, with bulls now looking to build on the momentum further beyond the $2,700 mark. This marks the fifth successive day of a positive move and is fueled by the global flight to safety amid persistent geopolitical tensions stemming from the intensifying Russia-Ukraine war.

Gold News
Ripple surges to a new yearly high; XRP bulls aim for three-year high of $1.96

Ripple surges to a new yearly high; XRP bulls aim for three-year high of $1.96

Ripple extends its gains by around 10% on Friday, reaching a new year-to-date high of $1.43 and hitting levels not seen since mid-May 2021. The main reasons behind the rally are the announcement that the US SEC's Chair Gary Gensler will resign and the launch in Europe of an XRP  ETP by asset management company WisdomTree.

Read more
A new horizon: The economic outlook in a new leadership and policy era

A new horizon: The economic outlook in a new leadership and policy era

The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures