Gold Price Forecast: XAU/USD bulls move back in, market remains coiled


Share:
  • The Gold price is back in line with the coil and would be expected to continue higher or at least stay sideways.
  • Failing this, then an even deeper move in Gold price would be on the cards for the days ahead with $1,775 eyed. 

As per the prior day's analysis, Gold Price Forecast: XAU/USD bulls need to commit at key trendline support, the Gold price has found demand at the said support area and has moved back into line with the broader bullish trend. Gold price edged up on Friday ahead of the Christmas holidays and long weekend and was supported by cooling inflation data in Friday's data storm. 

US consumer spending glided 0.1% higher in November after climbing 0.4% in October, in a sign that inflation is cooling, although not as much as markets need to see to start to expect a pivot from the Federal Reserve or a slowdown in their rate-hike path. Year-over-year, (YoY), the Personal consumption expenditures index, (PCE), landed at 5.5%, a half-percent cool-down from October. Stripping away volatile food and energy prices, the index was up on monthly and annual bases by 0.2% and 4.7%, respectively, in-line with consensus. The bad news for Gold price is that the October PCE inflation data was upwardly revised.

US Gross Domestic Product data on Thursday and Jobless Claims also highlighted the country's economy rebounded faster than previously estimated and that the jobs market remains very tight. All in all, the slew of data does little to turn the tables with regard to speculation that the Fed will stay the course to fight inflation in 2023. Such rate hikes to tame price pressure weigh on the non-yielding asset that pays no interest which is now on track for a second consecutive yearly decline.

Fed will have to do more

Analysts at Brown Brothers Harriman said markets still don't believe the Fed. ''After rising as high as 5.5% after the most recent FOMC meeting, the terminal rate as seen by the swaps market has fallen back to around 5.0%,'' the analysts explained. ''Similarly, WIRP suggests a 50 bp hike February 1 is only 33% priced in,  followed by a final 25 bp hike March 22.  We cannot understand why the markets continue to fight the Fed.  With the exception of some communications missteps here and there, chair Jerome Powell and company have been resolute about the need to take rates higher for longer.  Recent US data confirm that the labor market remains strong and that the Fed will have to do more.''

Gold price technical analysis

In the prior analysis, the Gold price dropped to the targetted area and exceeded it into the $1,784s for a 300% measured move and to where the prior micro trend started off at:

It was stated that a correction in the Gold price would be expected, respecting the bullish trend:

Gold price update

The Gold price is back in line with the coil and would be expected to continue higher or at least stay sideways. Failing this, then an even deeper move in Gold price would be on the cards for the days ahead, making the case for a significant downside correction with $1,775 eyed. 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD rises toward 1.0800 as USD weakens

EUR/USD rises toward 1.0800 as USD weakens

EUR/USD has gained traction and advanced toward 1.0800 in the early American session on Monday. The positive opening witnessed in Wall Street makes it difficult for the US Dollar to find demand and helps the pair continue to push higher.

EUR/USD News

GBP/USD closes in on 1.2300 as mood improves

GBP/USD closes in on 1.2300 as mood improves

GBP/USD has preserved its bullish momentum and advanced to the 1.2300 area in the second half of the day on Monday. The risk positive market atmosphere makes it difficult for the US Dollar to stay resilient against its rivals and fuels the pair's daily rally. Eyes on BOE Governor Bailey's speech.

GBP/USD News

Gold recovers above $1,950, stays deep in red

Gold recovers above $1,950, stays deep in red

Gold price has managed to stage a modest rebound in the American trading hours and rose above $1,950 from the daily low it set at $1,944. The benchmark 10-year US Treasury bond yield is still up more than 3% despite having retreated from session highs, not allowing XAU/USD to gain traction.

Gold News

Four reasons why SUSHI holders will have a bullish week despite SEC's move

Four reasons why SUSHI holders will have a bullish week despite SEC's move

SushiSwap price undid the early March gains in the last week after the SEC subpoenaed the platform’s head chef Jared Grey. As a result of this announcement, the token collapsed by roughly 18%.

Read more

Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk

Alibaba (BABA) edges higher after Jack Ma returns to China for AI talk

BABA shareholders begin the week with a glimmer of hope after founder Jack Ma was seen visiting China after spending more than one year abroad. The report originally led to Alibaba's shares in Hong Kong rising 4% before subsiding.

Read more

Forex MAJORS

Cryptocurrencies

Signatures