- Gold’s continued rise backed by risks in the Middle East involving Israel-Hamas, and Houthis vs. US/UK conflict.
- Market expectations of significant Fed rate cuts in 2024 boost Gold's appeal against a weakening Dollar.
- Focus on upcoming US economic data and Fed officials' speeches for further insights into Gold price dynamics.
Gold price extended its gains for three straight days and stayed firm above the $2050 figure on Monday amid thin volume conditions sponsored by a holiday in the United States (US). In the meantime, geopolitical risks, remained the main driver, as the XAU/USD trades at $2055, up by 0.32%, after hitting a low of $2046.
XAU/USD rallies on sour sentiment weighing on risk-perceived assets
Tensions in the Middle East stay high as the Israel-Hamas conflict has extended to a hundred days, while the Houthi militia continued to launch missiles against ships and vessels that would like to go through the Red Sea. Consequently, the US and the UK retaliated vs. the Iran-backed group, attacking the strategic objectives of the group and spurring risk aversion in the financial markets.
Besides that, increasing odds that the US Federal Reserve (Fed) would cut rates by 170 basis points in 2024 gave the precious metals a leg-up against the already battered Greenback. Additionally, to this, US Treasury yields continued to edge lower, particularly the short-end of the curve, as the US 10s-2s yield curve is at -0.20 basis points, as the 2-year note rate coupon is at 4.14%, while the 10-year benchmark yields 3.941%
Ahead of the week, the US economic docket will feature Fed speakers led by Governor Christopher Waller, Michael Barr, Michelle Bowman, and the New York Fed President John Williams on Tuesday and Wednesday. Data-wise, the calendar will feature Retail Sales, Industrial Production, and the University of Michigan’s (UoM) Consumer Sentiment.
XAU/USD Price Analysis: Technical outlook
The daily chart portrays the yellow metal as neutral-upwards biased, but in the short term, it has remained sideways. For a bullish continuation, buyers must crack the December 28 high of $2088.48 to challenge the $2100 figure. A breach of the latter will expose the all-time high at $2146.79. On the flip side, if sellers drag Gold’s spot price below the 50-day moving average (at $2019, that could pave the way for testing the $2000 figure.
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: The hunt for the 0.7000 hurdle
AUD/USD quickly left behind Wednesday’s strong pullback and rose markedly past the 0.6900 barrier on Thursday, boosted by news of fresh stimulus in China as well as renewed weakness in the US Dollar.
EUR/USD rebounds on Thursday after midweek pullback
EUR/USD tuned back into the high end on Thursday, getting bolstered by a broad-market selloff in the Greenback. US data that printed better than expected helped to ease concerns of a possible economic slowdown within the US economy looming over the horizon.
Gold holding at higher ground at around $2,670
Gold breaks to new high of $2,673 on Thursday. Falling interest rates globally, intensifying geopolitical conflicts and heightened Fed easing bets are the main factors.
Ethena Labs launches new UStb stablecoin backed by BlackRock's BUIDL token
Ethena Labs announced on Thursday that it has released a new stablecoin product, UStb. The new stablecoin will be fully collateralized by BlackRock's USD Institutional Digital Liquidity Fund and function similarly to a traditional stablecoin.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.