Gold Price Forecast: XAU/USD advances to $2,070 as market sentiment improves

Gold price demonstrates strength as US Dollar faces challenges on improved market sentiment.
The investor risk appetite improves as softer US data backs the Fed to be dovish in the upcoming policy meetings.
The downbeat US bond yields represent investors' mood bias toward lowered Fed’s policy rates anytime soon.

Akhtar Faruqui FXStreet

Gold price trades higher near $2,070 per troy ounce during the Asian session on Friday, recovering the recent losses from the previous session. The improvement in the US Dollar (USD) faded the shine of the yellow metal.

However, the softer economic data from the United States (US) might have put a ceiling on the advance of the Greenback as it reinforces the market sentiment bias toward the dovish stance of the US Federal Reserve (Fed) in its monetary policy decisions in early 2024.

The latest figures reveal a surprise increase in US Initial Jobless Claims, reaching 218K for the week ending December 23, surpassing the market's projection of 210K. Additionally, Pending Home Sales (MoM) for November turned stagnant at 0.0%, falling short of the anticipated 1.0% growth.

The subdued yields on US bond coupons reflect a sentiment anticipating lower Federal Reserve policy rates in the near future. This, in turn, is boosting investor risk appetite and contributing to the upward movement in Gold prices. The 2-year and 10-year yields on US Treasury notes are standing lower at 4.26% and 3.84%, respectively, by the press time.

The resurgence of major shipping firms in the Red Sea indicates a cautious step towards normalization, although apprehensions persist regarding the potential closure of the Gibraltar Strait by Iran. Traders are closely monitoring the intricate and ever-changing geopolitical landscape in the Middle East. Any updates in this volatile scenario have the potential to sway market sentiments and impact the demand for safe-haven assets, such as Gold.

XAU/USD: additional technical levels

Overview
Today last price	2069.76
Today Daily Change	3.22
Today Daily Change %	0.16
Today daily open	2066.54

Trends
Daily SMA20	2033.74
Daily SMA50	2004.6
Daily SMA100	1953.76
Daily SMA200	1960.47

Levels
Previous Daily High	2088.5
Previous Daily Low	2066.07
Previous Weekly High	2070.65
Previous Weekly Low	2016.17
Previous Monthly High	2052.03
Previous Monthly Low	1931.67
Daily Fibonacci 38.2%	2074.64
Daily Fibonacci 61.8%	2079.93
Daily Pivot Point S1	2058.91
Daily Pivot Point S2	2051.27
Daily Pivot Point S3	2036.48
Daily Pivot Point R1	2081.34
Daily Pivot Point R2	2096.13
Daily Pivot Point R3	2103.77

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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