- Gold price remains mildly bid near one-week-old resistance surrounding nine-month high.
- China’s Lunar New Year (LNY) holidays, pre-FOMC absence of Fed talks restrict market moves.
- Softer US Dollar keeps XAU/USD buyers hopeful ahead of PMIs, US Q4 GDP.
Gold price (XAU/USD) dodders around the $1,930 mark as bulls keep the reins after a five-week uptrend, printing mild gains to reverse the previous day’s pullback. In so doing, the precious metal aptly depicts the market’s conditions amid a light calendar and absence of Chinese traders, not to forget that Federal Reserve (Fed) policymakers are off stage during the pere-FOMC blackout.
China’s Lunar New Year (LNY) celebrations restrict the market moves in Asia not only because the dragon nation is the biggest economy in the region but also because the nation’s reopening recently bolstered global markets. Even so, the market optimism surrounding Beijing remains on the table and keeps the Gold price firmer due to China’s dominance in the XAU/USD market.
On the other hand, Fed policymakers enter a two-week silence period ahead of the February Federal Open Market Committee (FOMC). Their last sentences were mixed though they mostly defended the bank's hawkish bias. Even so, the market forecasts that the Fed will slow interest-rate increases for the second straight meeting in February, and get closer to a policy pivot. That said, downbeat US data and easing inflation woes underpin the dovish market’s expectations of the US central bank.
Against this backdrop, the US Treasury yields remain pressured, fading the last few days’ corrective bounces, while the US stock futures print mild losses and the Asia-Pacific equities trade is mixed.
Although Gold traders have started the week in a sluggish mode, the first readings of January’s Purchasing Managers Indexes (PMI) and the US fourth-quarter (Q4) Gross Domestic Product (GDP) could offer active days ahead. That said, XAU/USD traders will be interested in softer US data to keep the latest upside momentum intact.
Gold price technical analysis
Gold price grinds higher around a nine-month top marked in the last week while staying inside a 13-day-old bullish channel formation, currently between $1,972 and $1,921.
The impending bear cross on the MACD bearishly reinforces the XAU/USD failure to cross the one-week-old resistance line, close to $1,939 by the press time, to challenge the immediate upside.
It’s worth noting that the Gold price run-up beyond $1,972 could quickly challenge the April 2022 peak of $1,998 before targeting the $2,000 round figure.
Meanwhile, the firmer RSI (14) and the metal’s sustained trading beyond the 100-SMA level surrounding $1,880 keeps the Gold buyers hopeful. A break and close above the January 20 highs in the $1,930s, will be a key breakthrough for bulls, and probably lead to further upside. Alternatively, a break below $1,905 will create a more bearish scenario in the short term.
To sum up, the Gold buyers appear to be running out of steam but bears are off the table unless the quote stays beyond $1,880.
Gold price: Four-hour chart
Trend: Further upside expected
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
Editors’ Picks
AUD/USD consolidates in a range above mid-0.6700s
![AUD/USD consolidates in a range above mid-0.6700s](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/AUDUSD/hundred-bucks-3645622_XtraSmall.jpg)
AUD/USD holds steady above mid-0.6700s during the Asian session on Tuesday. The US Dollar languishes near a three-month low touched on Monday. Apart from this, the prevalent risk-on environment, bets that the RBA could be raising interest rates again and hopes for more stimulus from China lend support to the pair.
USD/JPY attracts some buyers above 158.00, investors await US Retail Sales data
![USD/JPY attracts some buyers above 158.00, investors await US Retail Sales data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/USDJPY/japanese-yen-currency-and-dollar-bank-note-60447626_XtraSmall.jpg)
USD/JPY trades on a stronger note around 158.30 on Tuesday during the early Asian trading hours. The uptick of the pair is bolstered by the modest rebound in US Dollar. Investors will take more cues from the US June Retail Sales and the speech from the Federal Reserve’s Adriana Kugler.
Gold price bulls retain control despite modest USD strength, risk-on environment
![Gold price bulls retain control despite modest USD strength, risk-on environment](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/Gold_Bar_XAU_Precious_Metal_XtraSmall.jpg)
Gold price remains close to a nearly two-month top set on Monday amid rising Fed rate cut bets. Investors seem convinced that the Fed will begin its rate-cutting cycle at the September meeting. The risk-on mood, along with a modest US Dollar strength, might cap the upside for the XAU/USD.
Could US become most crypto-friendly nation following Trump's VP pick?
![Could US become most crypto-friendly nation following Trump's VP pick?](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/cryptocurrenciesusd_XtraSmall.jpg)
Presidential candidate Donald Trump announced Ohio's Senator JD Vance as his running mate on Monday, securing a full pro-crypto stance for the Republican party.
The Trump trade
![The Trump trade](https://editorial.fxstreet.com/images/Macroeconomics/Countries/America/UnitedStatesofAmerica/wall-street-sign-with-us-flag-behind-7511217_XtraSmall.jpg)
The US markets may have had a mild reaction to the assassination attempt on Donald Trump at a rally in Pennsylvania at the weekend, however, there are long term ramifications for financial markets, particularly in Europe.