The gold price has achieved a 14% annual gain in 2023. The shiny metal had a head start on the first trading day of 2024. Gold does not have difficulty finding new demand despite the increase in US Dollar and US Treasury bond yields.
Yellow metal finds support from geopolitical tensions
Ongoing geopolitical risks in the Middle East keep investors on edge as we enter the new year. this too cryptokoin.comAs you follow from , the traditional safe haven supports interest in gold. Markets are tracking the conflict in the Red Sea combined with the ongoing Israel-Gaza conflict. He is wary that this conflict could escalate into a broader regional dispute. That’s why investors seek safety in havens such as gold.
Meanwhile, the US Dollar is also getting support from the prolonged recovery in US Treasury yields. Because investors’ focus is now shifting to high-level US economic data to be announced this week to revive interest rate cut expectations from the US Federal Reserve (Fed) for this year. Markets price the probability of the Fed to cut interest rates in March as 72%. Additionally, this rate stands at 84% for the May meeting.
Gold price is waiting for data for a new momentum
Additionally, recent factory data from China pointed to a fragile recovery. This could potentially hinder demand recovery in the region. Data failed to inspire risk sentiment. This was supportive for the gold price. China’s manufacturing activity contracted for a third consecutive month in December, weakening more than expected, according to official data released by China’s National Bureau of Statistics (NBS) on Sunday. On Tuesday, China’s Caixin Manufacturing PMI showed a modest improvement to 50.8 in December.
The latest manufacturing PMI data from Europe and the US will fill a relatively quiet economic calendar at the start of 2024. Next, all eyes will be on this week’s key U.S. employment data. JOLTs Recruiting Data will be out on Wednesday. ADP employment change and Nonfarm Payrolls reports will be released on Thursday and Friday, respectively. The Fed’s December meeting minutes, due on Wednesday, will also be closely scrutinized for new information on the central bank’s outlook for interest rates this year.
Gold price technical analysis: Bullis Cross
Market analyst Dhwani Mehta analyzes the technical outlook for gold as follows. As seen on the daily chart, the ascending trend line resistance currently located at $2,090 will remain a tough nut to crack in the gold price’s renewed uptrend. Acceptance above the latter based on the daily candlestick close would push the $2,100 barrier. The next target for gold buyers stands at $2,144, an all-time high if the uptrend continues.
Additionally, the 14-day Relative Strength Index (RSI) indicator has increased its upward traction while above the midline. This pointed to more profits in the future. The 100-day Simple Moving Average (SMA) adds credence to the bullish outlook. Moreover, it is on the verge of breaking the 200-day SMA from below. This depicts an upcoming ‘Bullish Cross’ for the gold price.
However, if gold sellers try to gain control, initial support will be at Friday’s low at $2,058. Below this, the round figure of $2,050 will come into play. The last line of defense for gold buyers is the 21-day Simple Moving Average (SMA) at $2,037.
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