As we approach the end of the year, gold investors are eagerly awaiting economic indicators and clues from the Federal Reserve. In this environment, the gold price consolidates its position above $ 2,000. Analysts assess that there is an upward trend in the technical picture.
Fed policy and market expectations
The market is intensely focused on the Fed’s future actions, especially after last week’s dovish signals. cryptokoin.comAs you follow from , Fed Chairman Jerome Powell pointed out that the end of the tightening cycle is approaching. Powell’s comments significantly affected expectations. Thus, bets on an interest rate cut by March 2024 have increased to over 60%. This expectation affected Treasury yields and, as a result, increased the attractiveness of gold. Therefore, the gold price settled above $2,000.
This week’s busy US economic calendar, culminating with the PCE inflation report, will be a critical determinant of future gold price movements. Strong economic indicators will likely fuel fears that interest rate hikes will continue. This will reduce the attractiveness of gold. Conversely, weaker data could strengthen interest rate cut expectations, providing further support for gold.
Impact of returns and global factors
Recently, the yield on 10-year Treasury bonds has fallen below 4%. This presents a positive scenario for gold, which becomes more attractive compared to interest-bearing assets. In addition, global factors such as the Bank of Japan’s commitment to ultra-loose policy and tensions in the Red Sea are contributing to current market uncertainty.
Short-term forecast for gold price: There is a slight upward trend
Market analyst James Hyerczyk evaluates the technical outlook for gold after recent developments. In the short term, gold prices are delicately balanced between dovish Fed expectations and upcoming economic data. A break above $2,030 indicates a bullish trend. However, a break below $2,020 will likely signal a profit-taking phase. The Fed’s policy decisions are crucial to the near-term trajectory of gold. Therefore, the most recent outlook is slightly bullish.
Gold price is trading above its 200-day and 50-day moving averages at $1,956.58 and $1,985.49, respectively. This points to a general upward trend in the medium and long term. Currently, at $2,024.22, gold is hovering in a zone between minor support at $2,009.00 and minor resistance at $2,067.00. Nearness to the minor support level indicates the potential for consolidation or reversal if this level holds.
However, the price is above the key moving averages. Additionally, it has the opportunity to reach minor resistance. So, there is an opportunity for upside momentum, especially if it clears the $2,067.00 resistance. Overall market sentiment remains cautiously optimistic as the gold price maintains its position above key moving averages and key support levels.
Gold price technical analysis: The path of least resistance is to the upside
Market analyst Dhwani Mehta interprets the technical picture of gold as follows. Technically, the path of least resistance is still to the upside. Therefore, nothing seems to have changed for the gold price. The 14-day Relative Strength Index (RSI) indicator continues to trade above the middle line. Gold price is defending the 21-day Simple Moving Average (SMA) at $2,016. A daily close below this level is required to exit recovery mode and head south to the $2,000 threshold. The next downside limit is at the 50-day SMA at $1,986.
On the other hand, it is critical for the gold price to be accepted above the $2,040-2,050 region in order to regain its upward traction towards the psychological level of $2,100. Further up, gold buyers will look to see the all-time high at $2,144.
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