XAU/USD Gold Price Analysis Today - Dollar Strength Prevents Further Gains

• The strong gains in the US dollar yesterday were a natural trigger for gold sales, but losses did not exceed $2,026 per ounce, and selling came from the $2,055 per ounce resistance level in the same trading session yesterday.
• shortly, some volatility has hit global foreign exchange markets, and the US dollar is rising in a noticeable way. 
• Moreover, a look at the performance board of the G10 currencies reveals that the dollar is rising against all of its peers, confirming that the US dollar's outperformance is ongoing. 

In general, a look at the global stock market landscape reveals that the reason for the dollar's advance is the sharp decline in global stock markets, from Asia, through Europe, to pre-market futures in the United States. Thus, this tells us that we are seeing a deterioration in investor sentiment, which is favoring the dollar as a safe haven. 

As for the performance of global markets, optimism prevails for 2024, with analysts expecting a strong 11.8% growth in earnings per share for S&P 500 companies, according to FactSet. This, along with expectations of multiple cuts in US interest rates by the Federal Reserve this year, has contributed to the Standard & Poor's 500 index reaching a 10-week high in the last 11 weeks. Meanwhile, the index remains within 0.6% of its all-time high recorded two years ago. 

Recently, treasury yields have already fallen in the bond market amid expectations of upcoming cuts in US interest rates, which traders believe could begin as early as March. It's a sharp shift from the past two years, when the Fed was raising interest rates dramatically in hopes of controlling high inflation. Generally, easier interest rates and yields ease pressure on the economy and financial system, while also boosting investment prices. Over the past six months, interest rates have been the main force moving the stock market, according to analysts at Morgan Stanley. Therefore, they believe that this dynamic will continue in the near term, with “the bond market continuing to dominate.” 

Currently, traders expect many more cuts in US interest rates through 2024 than the US Federal Reserve itself has indicated. Consequently, this increases the possibility of significant market fluctuations around every speech issued by the US Federal Reserve or official economic report. 

Gold Price Forecast and Analysis Today: 

Despite the recent gold (XAU/USD) selling, the Relative Strength Index (RSI) is in a neutral position, and there won't be a shift towards a bearish trend based on the performance on the daily timeframe chart above, without moving towards support levels of $2000 and $1985 respectively. So far, buying gold from every dip is still preferred, despite the strength of the US dollar, which weakens gold. However, gold is gaining momentum from increasing global geopolitical tensions and central banks' increased purchases of the yellow metal. In contrast, during the same timeframe, bull control may return to the gold market by moving towards the resistance levels of $2055, $2070, and $2085 per ounce once again. Today, the gold market will be influenced by the dollar level and market reactions to inflation figures in the Eurozone, China's data, and US retail sales numbers.