- Gold price is making efforts for maintaining its auction above $1,940.00.
- The recent rally in the Gold price was driven was weakness in the USD Index and fears of a banking sector meltdown.
- The USD Index is showing a subdued performance as odds for a 25bp rate hike by the Fed are accelerating.
Gold price (XAU/USD) has reverted to the $1,940.00 support after failing to extend its recovery above $1,946.00 in the Asian session. The precious metal is expected to remain sideways as investors are likely to execute meaningful positions after the announcement of the interest rate decision by the Federal Reserve (Fed).
It is worth noting that the Gold price is struggling to maintain its feet despite a subdued performance by the US Dollar Index (DXY). The recent rally in the Gold price was driven was weakness in the USD Index and stalwart fears of a banking sector meltdown in the United States after the collapse of three mid-size banks last week.
The commentary from United States Treasury Secretary Janet Yellen that Fed’s new Bank Term Funding facility and discount window lending are working to provide liquidity to the banking system has trimmed fears of further turmoil in the banking system. Also, the statement infused fresh blood into the share price of First Republic Bank on Tuesday. Earlier, the safe-haven appeal for Gold got firmer as investors shifted their money to bullions to safeguard themselves from sheer volatility.
The US Dollar Index (DXY) is continuously hovering around 103.20 as investors are cheering accelerating odds for a 25 basis point (bp) interest rate hike by the Fed. As per the CME Fedwatch tool, 85% chances are in favor of a 25bp rate hike, which would push rates to 4.75-5.00%.
Gold technical analysis
Gold price delivered a perpendicular decline after a breakdown of the Head and Shoulder chart pattern on an hourly scale. A breakdown of the aforementioned chart pattern indicates a bearish reversal after a consolidation move. The Gold price has dropped to near the demand zone placed in a range of $1,933.90-1,938.40.
The 20-period Exponential Moving Average (EMA) at around $1,950.00 would continue to act as a barricade for Gold bulls.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, which indicates the downside momentum is still active.
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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
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.