Gold’s Subdued Stance Amid Fed’s Mixed Rate Signals

The GOLD market (XAU/USD) struggles to build on its slight gains in the Asian market, hovering near the lowest point since October 19 seen the day before. Mixed messages from Federal Reserve officials regarding the rate hike trajectory have led to a withdrawal from non-interest-bearing gold since the week’s start. Diminished concerns over the escalation in the Israel-Hamas conflict have also reduced gold’s appeal as a safe haven.

Investors are largely betting on the Federal Reserve to begin rate reductions in 2024, contributing to a dip in US Treasury yields and placing pressure on the US dollar, which, in turn, provides marginal support to GOLD prices.

The cautious sentiment in the markets and China’s economic challenges may help temper further losses in GOLD . Now, the market focus shifts to the upcoming US Weekly Initial Jobless Claims data and Federal Reserve Chair Jerome Powell’s speech for further direction.

In the technical realm, gold prices exhibit a bearish trend, distancing from the $1,962.35 level, suggesting a continued downtrend with an interim corrective target at $1,933.30.

A double top pattern and the 50-day Exponential Moving Average (EMA)’s downward pressure support the bearish scenario, with a breach above $1,962.35 potentially halting the decline and signalling a potential resurgence of the main bullish trend.

Today’s trading range is expected to be between the support level of $1,933.00 and the resistance level of $1,962.00, with the trend forecasted to be bearish.

Gold XAU Live Chart