Daily Market Analysis and Forex News
XAUUSD recovers above $1980 amid softer US data
Gold prices have strongly rebounded up to ~$1986 after dropping below the $1950 round number last week.
The uplift comes as investors’ sentiment strongly leans towards no more rate hikes in the foreseeable future.
In fact, at the time of writing, markets are already predicting a one-in-three (35%) chance of a Fed rate cut happening by March 2024!
The recent drop in US CPI reading (0.2% MoM vs 0.3% MoM expected) has reignited investors interest in zero-yielding gold, as the possibility for sooner-than-expected lower US rates is now being pushed around the market.
On the technical side …
- XAUUSD is trading above the 21-period SMA, underlining a potential for a bullish trend
- The Relative Strength Index (RSI) is positioned at 61.16 (<30 – oversold; >70 – overbought), leaving a possibility for further growth
- ~$1980 may prove to be an immediate support level if XAUUSD bears decide to regain the initiative