- For the second day in a row, gold prices are trying to rebound higher with gains reaching the $2,044 resistance level, recovering from their strong losses at the end of last week that reached the $2,015 support level.
- Clearly, amid the strength of the US dollar due to the stronger-than-expected US jobs figures and the continued tightening of the US Federal Reserve's policy.
- Moreover, the gold market is still supported by the increasing global geopolitical tensions.
Temporarily, gold market gains paused after the US government sold a record $42 billion in 10-year notes on Wednesday at a lower-than-expected yield, in a sign that investors are confident that the US Federal Reserve will focus on cutting interest rates this year in response to the Fed's policy, which is leading to slowing growth. Furthermore, the notes were awarded at a yield of 4.093%, compared to an initial yield of around 4.105% just before 1:00 p.m. New York time, the deadline for bids. Moreover, the low yield indicates stronger demand than traders had expected. The auction result broke a streak of volatility - or weaker results for the previous four monthly sales - and US Treasury yields as a whole held steady as details were absorbed.
Before the auction, Treasury yields briefly fell to session lows on the latest wave of weakness in U.S. regional bank stocks led by New York Community Bancorp shares, whose loan portfolio has been hurt by rising interest rates. In the meantime, the S&P 500 was trading at record highs, highlighting the crosscurrents in the US economy. Clearly, this was reflected in the Treasury market last week, when strong US employment data for January sparked the biggest two-day sell-off in more than a year.
Another factor affecting the gold market, the price of the US dollar stabilized near the highest level in three months, supported by rising Treasury yields, amid growing expectations that the Federal Reserve is unlikely to cut US interest rates forcefully this year. According to trading, the dollar index, which measures the performance of the US currency against six major competing currencies, reached the resistance level of 104.42, after touching 104.60 on Monday, which is its highest level since November 14. In general, the index has increased by 3% since the beginning of the year 2024 until now, after declining by 2% in 2023.
Meanwhile, the released data at the beginning of the week showed that growth in the US services sector rebounded in January with an increase in new orders and a recovery in employment, which indicates a strong start to this year for the economy and comes after the strong jobs report last week. Overall, the series of strong US economic data has crushed any remaining hopes for early and sharp cuts in interest rates by the US Federal Reserve, as Federal Reserve Chairman Jerome Powell and other policymakers oppose this idea.
The CME FedWatch tool showed that traders have been reducing US interest rate cut bets since the beginning of the year and currently estimate only a 15% chance of a rate cut in March, compared to a 69% chance at the beginning of the year. Currently, they are now priced in cuts of 115 basis points this year, compared to about 150 basis points of easing expected in early January.
Gold Price Forecast and Analysis Today:
According to the performance on the daily time frame chart above, the price of gold, new. Over that period of time, the downward shift in the gold market will be confirmed by moving towards the support levels of $2000 and $1985, respectively. On the other hand, over the same time, the move towards the resistance levels of 2055 and 2070 dollars per ounce, respectively, will be important due to the strength of the bulls’ control over the trend. Today's economic calendar data is calm, and therefore the focus for the gold market will be on the level of the price of the US dollar and the extent to which investors are willing to take risks or not.
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