Gold price has regained momentum following speculation that interest rates in the US have reached their peak. The recent decrease in US bond yields has weakened the US Dollar, providing support for the safe-haven XAU/USD. On the first day of the new week, the Gold price attracted buyers near the $1,973 area, halting the slight pullback from the previous week’s high. The price of Gold is currently trading just below the $1,985 level, marking a nearly 0.20% increase for the day. This increase signals a potential rebound from last Monday’s monthly low, as the Federal Reserve (Fed) is expected to maintain its current stance and cut interest rates in 2024.
Investors are eagerly waiting for this week’s release of the FOMC meeting minutes on Tuesday, which will offer insight into the path of interest rates and the views of policymakers. The Gold price continues to receive support from various factors, including expectations that the Fed will not raise interest rates, signs of cooling consumer inflation, and a weaker US Dollar. Geopolitical tensions and potential recession risks also contribute to the upward movement of the Gold price.
From a technical perspective, the Gold price needs to surpass the $1,990 barrier before a sustained rally. If this level is cleared, the price could aim for the $2,000 psychological mark and retest a multi-month peak. On the downside, the immediate support lies near the $1,973 area, followed by the $1,963 region and the 200-day Simple Moving Average (SMA) near the $1,938-1,937 zone.
The USD today has shown a decline against major currencies, with the Canadian Dollar being the strongest performer. The heat map indicates percentage changes of major currencies against each other, with Gold maintaining an inverse correlation with the US Dollar and US Treasuries.
Gold is widely perceived as a safe-haven asset, offering protection during turbulent times and acting as a hedge against inflation and depreciating currencies. Central banks hold large reserves of Gold to strengthen their currency and boost investor confidence, with 2022 recording the highest yearly purchase of Gold by central banks in history.
Gold prices can be influenced by a wide range of factors, including geopolitical instability, economic recession fears, and fluctuations in the US Dollar. As the future of interest rates in the US unfolds, the direction of the Gold price is likely to be influenced by these and other factors.
