Gold Price Forecast: XAU/USD flat-lines below $2,050, focus on geopolitical tensions

Gold price trades flat around $2,045 amid the US bank holiday.
US Producer Price Index (PPI) for December rose by 1.0% YoY versus 0.8% prior, below market expectations.
The escalating geopolitical tensions in the Middle East might boost safe-haven buying and benefit gold price.

Lallalit Srijandorn FXStreet

Gold price (XAU/USD) trades on a flat note during the early Asian session on Monday. That being said, the uptick of the yellow metal is supported by the softer US Producer Price Index (PPI) data and rising geopolitical tensions in the Middle East. At press time, the gold price is trading at $2,045, losing 0.01% on the day.

On Friday, the US Producer Price Index (PPI) for December rose by 1.0% on a yearly basis from the revised 0.8% increase in November, below market expectations of 1.3%. The annual core PPI, which excludes volatile food and energy prices, climbed by 1.8% in December from 2.0% in the previous reading and was below the market consensus of 1.9%. The monthly core PPI remained unchanged for the third consecutive month.

The PPI report reveals some deflationary signs, which help boost confidence in the Federal Reserve's (Fed) cutting interest rates in March. Investors are pricing in 74.2% odds of a rate cut in March, up from 70% last week, according to the CME FedWatch Tool. This, in turn, weighs on the Greenback and acts as a tailwind for the gold price.

Apart from this, the gains of yellow metal were driven by safe-haven buying amid rising geopolitical tensions. The United States and the United Kingdom launched strikes against Houthi targets in Houthi-controlled areas of Yemen last week, marking a significant response after the Biden administration and its allies warned that the Iran-backed militant group would bear the consequences of its attacks on commercial shipping in the Red Sea.

In the absence of top-tier economic data from the US due to the Martin L. King's Birthday bank holiday, risk sentiment is likely to remain the key driver behind the gold price action. Later this week, the US NY Empire State Manufacturing Index will be due on Tuesday, Retail Sales will be released on Wednesday, and the Michigan Consumer Sentiment Index report will be published on Friday.

XAU/USD

Overview
Today last price	2048.56
Today Daily Change	0.96
Today Daily Change %	0.05
Today daily open	2047.6

Trends
Daily SMA20	2046.33
Daily SMA50	2017.22
Daily SMA100	1969.08
Daily SMA200	1963.56

Levels
Previous Daily High	2062.33
Previous Daily Low	2027.46
Previous Weekly High	2062.33
Previous Weekly Low	2013.38
Previous Monthly High	2144.48
Previous Monthly Low	1973.13
Daily Fibonacci 38.2%	2049.01
Daily Fibonacci 61.8%	2040.78
Daily Pivot Point S1	2029.26
Daily Pivot Point S2	2010.93
Daily Pivot Point S3	1994.39
Daily Pivot Point R1	2064.13
Daily Pivot Point R2	2080.67
Daily Pivot Point R3	2099

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.