The gold price (XAU/USD) dribbles around $1,930 after a five-week uptrend, printing mild gains to reverse the previous day's pullback. As a result, the precious metal accurately depicts market conditions amid a low calendar, the absence of Chinese traders, and the Fed policymakers' absence.
Chinese Lunar New Year (LNY) celebrations limit Asian market movements not only because China is the region's largest economy, but also because it recently reopened to global markets. Due to China's dominance in the XAU/USD market, the market optimism surrounding Beijing continues to keep Gold prices firm.
During the two-week silence period before the February FOMC meeting, Fed policymakers defended hawkish bias in the last few sentences. Markets, however, predict the Fed will raise interest rates slowly in February, and that the policy pivot is close. Although the US central bank's expectations were dovish, easing inflation woes and downbeat US data supported them.
Against this backdrop, US Treasury yields remain pressured around multi-day levels, fading recent corrections, while US stock futures print mild losses and Asian equities trade mixed.
Gold traders are starting the week in a sluggish mode, but the first readings of January's Purchasing Managers Index (PMI) and US Gross Domestic Product (GDP) could provide active trading. To maintain the recent upside momentum, traders will look for softer US data. Gold traders are starting the week in a sluggish mode, but the first readings of January's Purchasing Managers Index (PMI) and US Gross Domestic Product (GDP) could provide active trading. To maintain the recent upside momentum, traders will look for softer US data.
Within a 13-day-old bullish channel formation, gold prices are currently between $1,972 and $1,921, near a nine-month high.
XAU/USD's failure to cross the one-week-old resistance line, close to $1,939 by press time, will challenge the immediate upside along with the impending bear cross on the MACD.
Gold's price run-up beyond $1,972 may challenge the $1,998 peak of April 2022 before reaching $2,000 before the year ends.
Gold buyers remain hopeful despite the metal's sustained trading above the 100-SMA level of around $1,880 and firm RSI (14) indicators.
Unless the quote stays above $1,880, the bears are off the table. The Gold buyers appear to be out of steam.
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