- At the start of an important week, gold prices fell below $2,150 per ounce, reaching their lowest level in over a week.
- This was due to a stronger US dollar and higher Treasury yields, which were triggered by stronger-than-expected US inflation data that dampened expectations of early rate cuts.
- Also, the investors are cautiously awaiting monetary policy decisions from major global central banks this week, including the US Federal Reserve, the Bank of Japan, the Reserve Bank of Australia, and the Bank of England.
Furthermore, inflation and PMI figures for major economies will be announced. Most central banks are expected to keep interest rates steady this week, as traders look for clues about the possible start of interest rate cuts this year. Meanwhile, the Bank of Japan is expected to exit its negative interest rate policy due to rising wages, high inflation, and a stable economy.
In a factor impacting the gold market, the US dollar index (DXY) steadied around 103.5 on Monday as investors looked ahead to the Federal Reserve's policy decision this week, where it is expected to keep key US interest rates unchanged. Last week, the index rose 0.7% as hotter-than-expected US inflation data raised concerns that the Fed may keep interest rates at restrictive levels for longer.
Last Thursday data showed that US producer prices rose more than expected in February on both a monthly and annual basis. Moreover, this followed data earlier in the week showing that US consumer prices rose more than expected last month. Currently, the markets see about a 55% chance of a US rate cut in June, down significantly from around 80% seen earlier this month.
Gold Price Forecast and Analysis Today:
Despite the recent selling pressure, the overall trend for the price of gold remains bullish. According to the performance on the daily chart, a bearish trend reversal is unlikely to occur without gold prices moving towards the support levels of $2080 and $2020 per ounce. The current upward trajectory of gold prices is supported by the shift in global central bank policies towards easing, along with increased global demand for purchasing gold bullion led by global central banks. This is in addition to growing global geopolitical tensions, which support gold buying as a safe haven.
Based on the overall upward trend, the resistance levels of $2165 and $2180 per ounce are the next targets. From there, it would be prudent to consider selling gold, but without excessive risk.
The question now, will the price of gold decline in the coming days? Gold prices have risen by $89.55 per ounce, or 4.34%, since the beginning of 2024, according to trading on the Contract for Difference (CFD) tracking the standard market for this commodity. Finally, the gold is expected to trade at $2067.94 per ounce by the end of this quarter, according to global macroeconomic models and analysts' forecasts. Looking ahead, we anticipate gold to trade at $2134.44 within 12 months.
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