|

Gold Price Forecast: XAU/USD tumbles after hitting daily high near $2000, eyes on Fed decision

  • Gold price hits a daily high of $1996.73 but loses momentum in the aftermath of a mixed US inflation report.
  • US Bureau of Labor Statistics (BLS) reveals disinflation in the US, with annual and monthly readings posting mixed results.
  • Traders await the Federal Reserve’s decision, with money market futures expecting the Fed to hold rates, eyeing 100 basis points of rate cuts for 2024.

Gold price lost its bright after hitting a daily high of $1996.73, though it dropped in the aftermath of a softish inflation report in the United States (US), ahead of the upcoming Federal Reserve (Fed) monetary policy decision. The XAU/USD exchanges hands at $1979,40, down 0.11%

The yellow metal losses momentum ahead of the upcoming Fed’s decision

The US Bureau of Labor Statistics (BLS revealed the disinflation process in the US continues, as headline inflation was 3.1% YoY, below October’s 3.2%, but underlying inflation remains stickier at 4% in the twelve months to November. Monthly readings were mixed, with CPI standing at 0.1%, exceeding forecast by 0%, while core CPI was 0.3% as expected but higher than in October.

The data release underpinned Gold’s towards its daily high, though pared its gains, slumping below the $1985 mark, weighed by a recovery of US Treasury bond yields. Even though the Greenback (USD) remains soft as depicted by the US Dollar Index (DXY), down 0.23% at 103.85, the yellow metal remains unable to recover from its late losses.

Meanwhile, traders brace for the Federal Reserve’s decision on Wednesday, followed by Chairman Jerome Powell’s press conference. Despite inflation’s positive reading, money market futures had priced in 100 basis points of rate cuts for 2024 and remain cautious. Earlier in that day, the BLS would announce prices paid by producers.

XAU/USD Price Analysis: Technical outlook

Gold’s daily chart depicts the yellow metal is neutral to upward biased as long as it stays above the daily moving averages (DMAs). Nevertheless, as XAU/USD continues to drop, that would put into play the 50-DMA at $1966.41, followed by the 200-DMA at $1952.74. Further support lies at the 100-DMA at $1941.07. Once those levels are cleared, the XAU/USD would shift downwards. On the other hand, a bullish resumption looms, but bulls need to lift the spot price above the October 27 high at $2009.42.

XAU/USD

Overview
Today last price1979.09
Today Daily Change-1.79
Today Daily Change %-0.09
Today daily open1980.88
 
Trends
Daily SMA202006.98
Daily SMA501963.44
Daily SMA1001941.09
Daily SMA2001951.43
 
Levels
Previous Daily High2007.87
Previous Daily Low1975.9
Previous Weekly High2144.48
Previous Weekly Low1994.71
Previous Monthly High2052.03
Previous Monthly Low1931.67
Daily Fibonacci 38.2%1988.11
Daily Fibonacci 61.8%1995.66
Daily Pivot Point S11968.56
Daily Pivot Point S21956.25
Daily Pivot Point S31936.59
Daily Pivot Point R12000.53
Daily Pivot Point R22020.19
Daily Pivot Point R32032.5

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD climbs toward 0.7000 after strong China data dump

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery toward 0.7000 in Monday's Asian trading. Strong Chniese Q3 GDP and activity data for September strengthen the pair's advance, following RBA Assistant Governor Chris Kent's hawkish remarks.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold bulls hesitant below $4,200 as Fed risks and firmer USD cap intraday gains

Gold struggles to capitalize on modest intraday gains and remains below the $4,200 mark, well within a three-week-old trading range. US Federal Reserve Chair Kevin Warsh’s unwillingness to offer fresh cues on further policy moves forced investors to price out the possibility of policy tightening later this month. Moreover, the recent sharp pullback in US government bond yields from multi-year highs, which dragged the US Dollar to a two-week low on Friday, acts as a tailwind for bullion.

Pi Network: Weak momentum and waning demand reinforce downside bias

Pi Network edges lower, risking a bearish conclusion to its short-term consolidation above the $0.0774 horizontal support. A steady decline in the notional value of active PI futures contracts and the weekly spot trading volume suggests reduced retail demand. The PI token risks a retest of its record low around $0.0704 as bearish momentum remains dominant on the daily chart.

Canada CPI expected to show a pick-up in inflation in September

Canada’s September CPI figures will be the focus of attention on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures ahead of the BoC’s October 28 gathering, when officials are expected to keep the interest rate steady at 2.25%, broadly in line with analyst consensus.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff
Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.