Gold price is still looking for factors of strength to complete the current upward rebound. Recently, throughout this week's trading, XAU/USD could not break the resistance of 2047 USD per ounce before settling around the level of 2035 USD per ounce at the time of writing the analysis awaiting any new developments. Clearly, the price of the yellow metal is taking a break after its renewed rise recently, which helped prices to surpass the critical resistance level of 2000 USD. In general, gold prices rose by 0.2% this week, and in addition to their rise since the beginning of the year by 12%.
In the same performance, silver prices, the sister commodity of gold, maintained their upward trajectory. Silver futures contracts jumped to 24.485 USD per ounce. Generally, the price of white metal rose by 1.5% and rose by 1.3% since the beginning of the year so far. Moreover, the metals market finds support due to the weakness of US Treasury yields but is harmed by the strength of the US dollar. US Treasury yields were all in decline, with the yield on 10-year bonds falling by 6.5 basis points to 3.857%. Also, the yield on two-year bonds fell by 8.3 basis points to 4.354%, while the yield on 30-year bonds fell by 5.1 basis points to 3.985%. Furthermore, the bonds had shown renewed life after last week's sharp decline. Typically, volatility in interest rates affects the opportunity cost of holding non-yielding bullion.
Another factor affecting the gold market, The US dollar index (DXY), a measure of the dollar against a basket of other major currencies. Recently, DXY rose to 102.42, from the opening at 102.19. Meanwhile, the US index is still down by 0.45% this week and more than 1% over the year. Commonly, a weaker US dollar is typically bullish for dollar-denominated commodities as it makes them cheaper for foreign investors to buy.
Will Gold Prices Fall in the Coming Days?
Concurrently, gold could benefit from sharp stock selloffs on Wednesday, potentially extending throughout the week. Investors, however, might be cautious about holding gold since the U.S. furthermore, Federal Reserve seemed to step back from its cautious tone in the December Federal Open Market Committee (FOMC) meeting. As a result, consensus suggests that gold prices (XAU/USD) could trade between $1950 and $2150 in the short term.
On the economic data front, the main event on Friday will be the release of the U.S. Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index. For other metal markets, copper futures dipped to $3.88 per pound, while platinum futures rose to $966.90 per ounce. Finally, Palladium futures fell to $1212.50 per ounce.
Gold Price Forecast and Analysis Today:
There is no change in my technical view of gold's performance (XAU/USD), as the overall trend remains upward. Technically, the stability above the psychological resistance of $2000 per ounce still supports bullish control. In case the U.S. dollar weakens further, global geopolitical tensions rise, and central banks' gold purchases increase, gold prices may move towards peaks of $2055, $2070, and $2085 per ounce, respectively. Conversely, based on the daily chart performance below, there won't be a break in the upward trend without gold moving towards the support level of $1985 per ounce again.
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