Gold Remains Rangebound

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Gold Remains Rangebound

Gold Reclaims $2000 Price Level, Remains Rangebound On Rate Worries

Gold prices showed bullish momentum during Monday's session and rebounded from their monthly lows.

The recent price action is a welcoming development, considering that gold prices have recently dropped under significant support.

Gold Trades In $2000 - $20250 Range

The key theme in the Gold market is the fear that higher interest rates will remain a reality in the USA. Since Gold belongs to the class of non-yielding assets, it means bad news for the Gold. That's the primary reason that is preventing Gold from turning fully bullish in the current conditions.

In early February, Gold lost the $2k support on a solid inflation report, diminishing the hopes for rate cuts.

Although Gold has reclaimed the support zone, it is still rangebound between $2000 and $2050. This is a $50 area that has kept the Gold prices under check since the start of 2024.

With a hawkish Fed and the prospects of sticky inflation, Gold is having difficulty starting a full-fledged bullish party.

When checked last time, Spot gold was trading near $2019.95 with a +0.3% change, while the Gold Futures (April contract) was seen near $2031.15 with a +0.4% change.

Another factor weighing heavily on the Gold is the US Dollar strength, which is already sitting comfortably close to the 3-month high. With the upcoming PPI release, the US Dollar is forecasted to rise even further.

The bottom line is that the Fed has little to no reason to go towards the rate cuts, especially after the recent CPI report. As a result, the assets like Gold, Silver, & Copper are struggling.

Now, the focus is on the meeting minutes of the Fed's January meeting to understand how the Fed is planning its monetary policy. Any hints at early rate cuts will be rejoiced upon by the gold market bulls.

Like Gold, other precious metals like Platinum and Silver are also down by 0.3% and 1.3%, respectively.

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