Gold price fails to build on overnight positive move amid hawkish Fed expectations.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level1)]

• Gold price fails to build on overnight positive move amid hawkish Fed expectations.
• A modest downtick in the US bond yields undermines the USD and lends some support.
• Geopolitical risks and China’s economic woes also contribute to limiting the downside.

Gold price (XAU/USD) struggles to capitalize on the previous day’s positive move and trades with a mild negative bias heading into the European session on Wednesday. The incoming stronger US macro data, along with the recent hawkish remarks by several FOMC members, including the Federal Reserve (Fed) Chair Jerome Powell, forced investors to further scale back their expectations for early and steep rate cuts in 2024. This assists the US Dollar (USD) in stalling the overnight retracement slide from its highest level in almost three months and acts as a headwind for the non-yielding yellow metal.

That said, the risk of a further escalation of military action in the Middle East, along with persistent worries about slowing economic growth in China, lends some support to the safe-haven Gold price. Furthermore, traders now seem reluctant to place aggressive directional bets and prefer to wait for more cues about the likely timing of the first interest rate cut by the Fed, which will influence the precious metal. Hence, the focus will remain glued to next week’s release of the latest US consumer inflation figures. In the meantime, traders on Wednesday might take cues from speeches by Fed officials.

From a technical perspective, the overnight swing low, around the $2,023 area, now seems to protect the immediate downside ahead of the weekly trough, around the $2,015 region. Some follow-through selling below the $2,012-2,010 area might expose the $2,000 psychological mark. A convincing break below the latter could drag the Gold price towards the 100-day Simple Moving Average (SMA), currently around the $1,985 zone, en route to the 200-day SMA, near the $1,966-1,965 region.

On the flip side, any meaningful positive move is likely to confront stiff resistance near the $2,054-2,055 zone. This is followed by the $2,065 hurdle or last week’s swing high. Given that oscillators on the daily chart are holding in the positive territory, a sustained strength beyond has the potential to lift the Gold price towards the $2,078-2,079 area, or the YTD peak set in January. The subsequent move-up should allow the XAU/USD to reclaim the $2,100 mark and climb further to the next relevant hurdle near the $2,020 region.

[/s2If]

The NEHCAP currently runs the following trading systems for clients. They can be bought and run on your funds.

The system is trading live: LIVE ACCOUNT TRACKING
Contact Us: Contact
The HFT_FIX can be run free for 2 weeks on any broker with a ECN. Apply for a free trial
Join Our Telegram Group