- Gold price has refreshed its day high at $1,935.00 amid a volatile USD Index.
- The Fed is expected to hike interest rates by 25 bps to 4.50-4.75% next week.
- Gold bulls need immense strength to take out pessimism as the higher-low structure has messed up.
Gold price (XAU/USD) has refreshed its day’s high at $1,935.00 in the Asian session. The precious metal picked strength after a minor drop below $1,930.00, which poised a bargain opportunity for gold buyers. The US Dollar Index (DXY) slipped sharply after failing to surpass the critical hurdle of 101.80.
The USD Index dropped to near 101.40 and is likely to remain on tenterhooks ahead of the release of the Federal Reserve (Fed)’s most preferred inflation tool, the United States Personal Consumption Expenditure (PCE) Price Index (Dec). The economic data is seen rising by 0.3% vs. 0.2% reported earlier.
Meanwhile, the risk profile is displaying dubious outcomes as S&P500 futures are showing decent losses after an upbeat Thursday trading session. While the risk-perceived currencies are showing immense strength.
Gold price could face a squeeze in volatility as investors are broadly shifting their focus towards the announcement of the interest rate decision by Fed chair Jerome Powell next week. As per the CME FedWatch tool, the chances of a 50 basis point (bps) interest rate hike are less than even 1%. Therefore, the borrowing rates might escalate to 4.50-4.75%.
Gold technical analysis
Gold price is auctioning in a Rising Wedge chart pattern on an hourly scale, which indicates a volatility contraction on a broader note. The precious metals displayed a responsive buying action after dropping below January 25 low at $1,919.91, recorded a lower low, however the expression of the lower low is weak as buyers jumped in and demonstrated a firmer buying interest. But, one cannot deny the fact that the structure has messed up and the Gold bulls will require immense strength to remain in a positive trajectory.
The Gold price has recovered to near the 20-period Exponential Moving Average (EMA) at $1.933.16. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
Gold hourly chart
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 in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.