Gold prices continue to hold on to the critical resistance at $2,040. But some analysts say the precious metal needs a new catalyst to break out of its current range, or at least more insight into the Federal Reserve’s monetary policy trajectory.
Gold prices need a new catalyst
cryptokoin.comAs you follow from , the shiny metal had a relatively quiet start to the week. The gold market is not seeing much direction from the dollar as the US dollar index remains sluggish over the holidays. The yellow metal managed to start and sustain above $2,000 into the new year. However, the market awaits further guidance on monetary policy from the Federal Reserve. Some analysts predict that gold will continue to consolidate in this process.
“Individual sales data can offer a new life for gold prices!”
Meanwhile, markets continue to price in aggressive rate cuts this year. Expectations are that the Fed’s easing cycle will begin in March. However, central bankers are not very keen on this idea. They showed with their statements that they did not embrace this idea. Meanwhile, Wednesday’s individual sales data is important for the market. According to some analysts, these data may create some volatility for gold. Pepperstone Research Manager Chris Weston makes the following assessment for gold prices:
Weak US retail sales data could offer new life for gold bulls. Thus, gold prices may move towards the $2,075 target.
For the rally, gold needs to break $2,100 and hold on above it!
Meanwhile, gold continues to maintain its place. However, new investors prefer to stay on the sidelines. Trade Nation Senior Market Analyst David Morrison says more work is needed to attract new investors to the market. The analyst explains his views on this issue as follows:
There is good clear water between the current gold price and the main support around $2,000-2,010. But bulls need to see gold break and hold above $2,100 to significantly increase the odds of a more significant rally.
Ole Hansen, head of commodity strategy at Saxo Bank, points to $2,060 as the critical level for gold prices. He notes that if gold rises above this level, the market momentum may reach up to $2,088.
What does it take for investors to enter the market?
Investors are reluctant to enter the gold market as the Fed continues its restrictive monetary policy. Some analysts say gold markets need to see a real interest rate cut before investors step aside and return to the market en masse.
Safe-haven demand is possible to push gold to $2,100
Lackluster investor demand continues to be a critical theme in gold-backed exchange-traded funds, which fell to a four-year low last week. Although gold remains neutral, analysts do not expect to see a sharp decline in the precious metal as safe-haven demand continues to provide critical support. Analysts predict that further escalation of tensions in the Middle East will likely increase safe-haven demand for gold. In this case, according to analysts, it is possible for gold prices to rise up to $2,100.
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