The Gold price (XAU/USD) has maintained a mild upward trend for the third consecutive day, although it shows signs of reluctance to extend its gains beyond a one-and-a-half-week high reached in the previous session. Despite Friday’s robust monthly jobs report in the United States, the positive macro data released on Thursday has fueled doubts about an early policy easing by the Federal Reserve (Fed) in March 2024, contributing to a modest recovery in US Treasury bond yields. This, coupled with the prevailing risk-on sentiment supported by expectations of additional stimulus measures from China, acts as a headwind for the safe-haven precious metal.
On the downside, the impact is softened by the Fed’s recent dovish stance, which has driven the US Dollar (USD) to its lowest point in over four months. This shift should favor the non-yielding Gold price. Traders are now turning their attention to the US economic calendar, featuring key releases such as the Empire State Manufacturing Index, Industrial Production figures, and flash PMI prints for December. These data points may influence USD price dynamics and provide impetus for the commodity. Despite this, the XAU/USD appears to have temporarily halted its post-FOMC rally around the 50-day Simple Moving Average (SMA) support. Nonetheless, it remains poised to record modest weekly gains.
Technical Overview of the Gold Market
The Gold market found support around $1,979, effectively halting the pronounced bearish movement initiated from the $2,029 price level. Bullish intervention from the $1,979 level prompted a substantial rally, propelling the price towards the $2,040 mark. It is anticipated that the Gold market may conclude the week with a close above the $2,000 price level.
Looking ahead to the next week, there is a possibility of the market continuing its ascent towards the $2,080 price level, which marks the origin point of the previous bearish trend. While there is a mild bearish sentiment at the current $2,040 price threshold, it is expected that bulls will regain control of this level, potentially leading to a retracement of the price to the aforementioned $2,080 level.
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