- Gold price bulls are in the market and eye the $2,000s.
- The Federal Reserve´s preferred inflation measure could be a catalyst on Friday.
Gold price has been buoyed in part by a weaker US Dollar and expectations for a fall in interest rates. The US Dollar index was down 0.4% at 102.20, raising the appeal of dollar-denominated gold prices. XAU/USD has traveled between a low of $1,955 and $1,984.36 on Thursday.
Analysts at TD Securities argued that investor participation has remained muted despite little evidence of a boon from safe-haven demand in gold markets. ´´In reality, underwhelming CTA flows have weighed on the white metal's performance, despite substantial buying activity in China,´´ the analysts explained.
´´Today, prices are surging overnight amid several large-scale CTA buying programs, as a drift lower in key trigger levels has finally kicked off significant algorithmic buying activity that should help the metal outperform, ´´ the analysts added further.
Federal Reserve sentiment, key for Gold price
Meanwhile, with the Federal Reserve in mind, the February reading of personal consumption expenditures (PCE) on Friday, the Fed's preferred inflation gauge, will be released and could be a catalyst for the Gold price. January figures showed a sharp acceleration in consumer spending so the data will be closely eyed.
´´Comments from Fed officials have been mixed with Jerome Powell indicating last week that the impact of the recent turmoil in the banking system could be the equivalent of 25bp of tightening,´´ analysts at ANZ Bank said. ´´However other Federal Reserve officials have pointed out that more tightening will be required if inflation risks persist.´´
Meanwhile, US data on Thursday showed that Jobless Claims last week rose more than expected from the week before indicating a cooling labor market, while fourth-quarter Gross Domestic Product growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.
Gold price technical analysis
Gold price was testing the $1,980s resistance but the W-formation was a bearish pattern and this pulled on the Gold price. The gold price bulls have steppe din at neckline support and the price has rallied back into resistance. A pull back into the Fibonacci scale could be the next development before a move higher should the Gold price bulls stay committed with eyes on a restest in the $2,000s
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
EUR/USD stays pressured toward 1.0500, US PPI data next in focus
EUR/USD remains heavy toward 1.0500 in the European session on Thursday, hanging at yearly lows. The Trump trades-driven unabated US Dollar demand and tarrifs threat weigh on the pair. Mixed Eurozone data fail to lift the Euro. Eyes turn to US PPI data and Fed Chair Powell.
GBP/USD holds losses near 1.2650 on relentless US Dollar buying
GBP/USD is holding losses while flirting with multi-month lows near 1.2650 in European trading on Thursday. The pair remains vulnerable amid a broadly firmer US Dollar and softer risk tone even as BoE policymakers stick to a cautious stance on policy. Speeches from Powell and Bailey are eyed.
Gold price approaches 100-day SMA/50% Fibo. confluence amid sustained USD buying
Gold price touches its lowest level since September 19, around $2,550 area during the early part of the European session on Thursday. The US Dollar buying remains unabated in the wake of optimism over the expected expansionary policies by US President-elect Donald Trump.
XRP struggles near $0.7440, could still sustain rally after Robinhood listing
Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
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.