- Gold futures (XAU/USD) are struggling to determine their direction as investors prepare for key economic data and weigh the policy of the US central bank.
- According to recent trading, the gold price (XAU/USD) has had a challenging start to this year and failed to capitalize on the year-end increase in 2023.
- Now, financial markets are waiting to see if the gold price can hold at $2,000 per ounce.
The gold price (XAU/USD) is hovering around the $2,030 level as of the time of writing this analysis, with the highest price this week reaching the resistance level of $2,038 per ounce. Overall, the gold price has decreased by approximately 1% during the past week and has fallen by over 2% since the beginning of the year 2024. In contrast, silver prices, the sister commodity to gold, rose above the $22 level per ounce. According to recent trades, the price of the white metal has decreased by about 4% in the past week and has fallen by 6.5% since the beginning of the year so far.
In general, metal markets will closely monitor important economic data this week, with the release of the fourth-quarter US Gross Domestic Product (GDP) report on Thursday. Moreover, the GDP growth estimate, as provided by the Federal Reserve Bank of Atlanta's GDPNow model and the New York Federal Reserve's Nowcast model, is around 2.4%. also, the flexible economic landscape could provide more room for the Federal Reserve to keep US interest rates high for a longer period.
Recently, investors have actually changed their expectations. As the FX Daily Report noted: “According to the CME FedWatch tool, the futures market is no longer anticipating interest rate cuts at the Federal Open Market Committee (FOMC) meeting in January or March. Currently, most markets expect a quarter-point drop in the benchmark federal funds rate in May. Therefore, this shift has supported the US Treasury bond market and the price of the US dollar.
In fact, the dollar and bonds performed well and will likely limit the yellow metal's gains. According to trading, the US Dollar Index (DXY), which is a measure of the dollar against a basket of other major currencies, advanced to 103.70, from opening at 103.33. Usually, A stronger dollar is bearish for US dollar-denominated commodities because it makes them more expensive for foreign investors to purchase.
Another factor affecting the gold market was that most Treasury markets rose, as the ten-year bond yield rose five basis points to 4.145%. Recently, the yield on two-year bonds rose 2.4 basis points to 4.4%, while the yield on 30-year bonds rose 6.5 basis points to 4.381%. Obviously, gold is sensitive to interest rate fluctuations because it affects the opportunity cost of holding non-yielding bullion.
As for other metal markets, copper futures rose to $3.8005 per pound. Contrarily, Platinum futures fell to $906.90 an ounce. Moreover, Palladium futures rose to $950.50 an ounce.
Gold Price Forecast and Analysis Today:
Based on the performance on the daily chart above, the price of gold XAU/USD is still in a neutral position with an upward bias. As mentioned before, the price of gold will remain supported by the increasing global geopolitical tensions and the increase in gold purchases by central banks for hedging. Therefore, any decline in the price of gold could remain an opportunity to buy again. Technically, the closest support levels for gold are $2010 and $1985 per ounce, respectively. In contrast, the bulls will regain control of gold again if prices move towards the levels of $2055 and $2070 per ounce, respectively.
Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.