With the start of trading this week, gold prices XAU/USD rose to the resistance level of $2,033 per ounce despite the strength of the US dollar and gains in US Treasury yields. In general, the price of the yellow metal is looking to regain momentum after it fell just after touching the record level of $2,152.30 per ounce. Consequently, gold prices XAU/USD will benefit from broader financial markets and geopolitical tensions this week, as it will be relatively quiet on the front of US economic data.
According to trading, the price of gold, XAU/USD, recorded weekly gains of about 2%. In addition to its rise since the beginning of the year until now by approximately 12%. In the same performance, silver, the sister commodity to gold, faced difficulty in maintaining the level of $24 per ounce. Recently, the price of silver enjoys weekly gains of about 4%, but it is still down by about 0.3% on an annual basis.
Will the price of gold decrease in the coming days?
currently, the XAU/USD gold price benefited greatly from the Federal Reserve’s indication of three cuts in US interest rates next year and two more in 2025. Therefore, that indicates an easing of US monetary policy conditions. Moreover, there has been some confusion since the Fed's last policy meeting in 2023.
New York Fed President John Williams recently told CNBC that officials have not discussed interest rate cuts. In addition, Chicago Fed President Austin Goolsbee told Business News Network that investors may have misinterpreted the central bank. “It's not what you say, or what the chair says,” Chicago Fed President Austan Goolsbee said on CNBC's "Squawk Box." He adding, “It's about what they heard, what they wanted to hear.” “I was confused – was the market just calculating, that's what we want them to say?”
On the other hand, US Treasury bond yields fell after the announcement, while stocks rose. However, bonds started to make a comeback with the 10-year bond yield rising three basis points to 3.96%. Latterly, the yield on two-year bonds settled at 4.455%, while 30-year bond yields rose 4.6 basis points to 4.07%. Usually, the gold market is sensitive to fluctuations in interest rates because it affects the opportunity cost of holding non-yielding bullion.
Another factor affecting gold, The US Dollar Index (DXY), a measure of the dollar against a basket of other major currencies, was relatively unchanged at around 102.50. lately, the dollar index felt last week after news of the US Federal Reserve. Obviously, a weaker dollar is beneficial for commodities priced in dollars because it makes it cheaper for foreign investors to buy them. Shortly, the Fed's preferred inflation measure (PCE), final third-quarter GDP estimate, and housing data will be published this week.
For other metals markets, copper futures fell to $3.8485 per pound. Also, Platinum futures fell to $954.40 an ounce. Similarly, Palladium futures fell to $1,190.00 per ounce.
Gold Price Forecast and Analysis Today:
Technically, there is no change in my technical view on the performance of the gold price (XAU/USD). The overall trend remains upward, and the psychological resistance at $2000 per ounce will continue to support this trend. Meanwhile, the price of gold may continue to monitor the future policies of global central banks and global geopolitical tensions, especially in the Middle East. Today, the Bank of Japan will announce its monetary policy, followed by inflation figures in the Eurozone. Clearly, the nearest resistance levels for the current performance are $2045, $2070, and $2085, respectively. On the other hand, based on the performance on the daily chart, the support level at $1985 per ounce would represent the first break for the current upward trend.
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