The rise in the US dollar since the start of trading in 2024 helped to push gold prices down by more than 1% yesterday. Furthermore, after the release of the minutes of the latest Federal Reserve meeting, which contained a strong signal for future interest rate hikes. In addition, profit-taking by traders helped to push gold prices down to the support level of $2,030 per ounce. Before that, we had advised our valued customers to sell gold from the resistance level of $2,068 per ounce. Now, gold is stabilizing around $2,048 per ounce. In general, three-month US gold futures have seen a larger loss of 1.6%.
At the same time, the US dollar index (DXY) is posting its biggest daily gain since July, supported by rising US yields, which have made dollar-denominated bullion more expensive for foreign buyers.
Will the Price of Gold decrease in the Upcoming Days?
Expectations regarding the future of the gold price remain positive amid expectations that the Federal Reserve will cut US interest rates sometime this year 2024. In this regard, Daniel Pavilonis, chief market analyst at RJO Futures, indicated that the possibility of escalation in the Red Sea is... That would keep gold prices supported. Significantly, the price of gold achieved gains of 13% in 2023, its first annual rise since 2020, and it is expected to reach record levels in 2024 if the low interest rate environment is achieved. Commenting on the future of gold, Fouad Razaqzada, market analyst at City Index, said: “As we have seen the extent of the rise in the price of gold resulting from expectations of interest rate cuts in 2023, we can see significant gains in 2024 when central banks actually begin to ease their policies.”
The analyst added that the actual timing and extent of interest rate cuts will depend on data received throughout the year. This week, after announcing the content of the minutes of the last meeting of the US Federal Reserve. Data on US job opportunities and non-farm payrolls for December will be followed, scheduled for release tomorrow, Friday.
Gold Price Forecast and Analysis Today:
Based on the performance of the daily chart, the price of gold XAU/USD still has a chance to maintain the upward trend. Technically, the trend will not be broken without a move towards the support levels of $2,000 and $1,985 per ounce, respectively. Moreover, gold market is still receiving positive momentum from the increasing global geopolitical tensions and the start of the global central banks' abandonment of their tightening policies in the new year. Currently, the nearest resistance levels for the trend are $2,060 and $2,075, respectively. Shortly, the price of gold may remain around its current path until the reaction to the release of US employment figures tomorrow, Friday, which will have a strong impact on the future policy of the US Federal Reserve as well as the dollar.
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