Gold Price Forecast: XAU/USD bulls run into key resistance

Gold price bulls are in the market and eye the $2,000s.
The Federal Reserve´s preferred inflation measure could be a catalyst on Friday.

Ross J Burland FXStreet

Gold price has been buoyed in part by a weaker US Dollar and expectations for a fall in interest rates. The US Dollar index was down 0.4% at 102.20, raising the appeal of dollar-denominated gold prices. XAU/USD has traveled between a low of $1,955 and $1,984.36 on Thursday.

Analysts at TD Securities argued that investor participation has remained muted despite little evidence of a boon from safe-haven demand in gold markets. ´´In reality, underwhelming CTA flows have weighed on the white metal's performance, despite substantial buying activity in China,´´ the analysts explained.

´´Today, prices are surging overnight amid several large-scale CTA buying programs, as a drift lower in key trigger levels has finally kicked off significant algorithmic buying activity that should help the metal outperform, ´´ the analysts added further.

Federal Reserve sentiment, key for Gold price

Meanwhile, with the Federal Reserve in mind, the February reading of personal consumption expenditures (PCE) on Friday, the Fed's preferred inflation gauge, will be released and could be a catalyst for the Gold price. January figures showed a sharp acceleration in consumer spending so the data will be closely eyed.

´´Comments from Fed officials have been mixed with Jerome Powell indicating last week that the impact of the recent turmoil in the banking system could be the equivalent of 25bp of tightening,´´ analysts at ANZ Bank said. ´´However other Federal Reserve officials have pointed out that more tightening will be required if inflation risks persist.´´

Meanwhile, US data on Thursday showed that Jobless Claims last week rose more than expected from the week before indicating a cooling labor market, while fourth-quarter Gross Domestic Product growth was slightly lower at 2.6% compared with earlier estimates of 2.7%, both supporting the case for a softer Fed policy.

Gold price technical analysis

Gold price was testing the $1,980s resistance but the W-formation was a bearish pattern and this pulled on the Gold price. The gold price bulls have steppe din at neckline support and the price has rallied back into resistance. A pull back into the Fibonacci scale could be the next development before a move higher should the Gold price bulls stay committed with eyes on a restest in the $2,000s

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

AUD/USD gains traction near 0.7100 as the post-Fed USD rally pauses

AUD/USD finds fresh buyers and retakes 0.7100 in the Asian session on Thursday as the US Dollar pauses its hawkish Fed-inspired rally to its highest level since late July. However, RBA rate-hike bets and hopes for US-Iran diplomatic efforts lift risk sentiment and support the risk-sensitive Australian Dollar and the major.

USD/JPY reverses a dip below 156.00 as focus shifts to BoJ

USD/JPY is reversing a brief dip below 156.00 in the Asian session on Thursday, looking to snap a three-day winning streak to a nearly two-week top set the previous day. The US Dollar pauses following the post-Fed rally to seven-week highs, while a more hawkish repricing of the BoJ's policy normalization path supports the Japanese Yen. This keeps the pair's upside limited, with the focus now shifting to the BoJ policy decision due on Friday.

Gold bounces but not out of the woods yet

Gold is facing fresh sellers above $4,300 early Thursday, stalling its recovery from six-week lows of $4,235 reached soon after hawkish US Federal Reserve monetary policy announcements.

Bitcoin, crypto market see muted activity following FOMC rate hike

Bitcoin traded above $76,000 on Wednesday as the Federal Reserve raised its benchmark interest rate by 25 basis points, bringing the federal funds target range to 3.75%-4.00%. The unanimous 12-0 decision marked the Fed’s first rate hike since July 2023.

The Fed rate hike: What happens now?

The dust has settled on tonight’s Fed meeting and the market reaction is clear: the Fed’s signal that there could be a series of rate hikes has spooked financial markets. Bonds sold off at the short end of the Treasury curve and US stocks also fell, led by the Dow Jones Industrial Average, which slipped more than 1% on Wednesday night.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.