Gold Trades Under Key Level

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Gold Trades Under Key Level

Gold (Xau/Usd) Trades Under $2050 As Uncertainty Looms.

The gold price action remained mixed during Thursday's session as there's growing uncertainty about the timeline of the upcoming rate cut from the Fed.

This uncertainty has kept the Gold under pressure while the US Dollar enjoys a slight upside. In addition, the NFP data also turned the investors towards the greenback & and out of Gold.

$2100 And $2050 Resistance Levels Ahead

The bottom line is that Gold is under pressure as it trades below the $2100 and $21050 resistance levels. Other non-yield assets will remain weak unless we get some certainty from the Fed.

In the last days of December 2023, a strong rally was seen in the Gold prices. At that time, the market was optimistic that the next rate cut was just three months away. But now, the ground situation regarding the Fed rate cuts and Gold has changed completely.

Another factor that is bearish for the yellow metal is the profit-taking. As the year 2024 has started, many investors exited their positions in Gold to take profit or for portfolio rebalancing.

For now, Spot Gold can be seen near $2043 with a +0.1% change on the daily timeframe. As for Gold futures, it is trading at $2050 with a +0.4% change. During the initial two days of 2024, spot gold and gold futures closed with a -1 % change.

The elephant in the room is the Federal Reserve doubt that continues to cast doubt on the FX and precious metal market. The Fed chair said something while the Fed members shared something completely different!

Despite this, 2024 will likely lead to 75 bps rate cuts from the Federal Reserve. However, when this is happening, it is something that remains to be seen.

look at the US economy shows that 2024 is welcomed with an inflation rate higher than 2%. Despite all the efforts to control inflation, things are still not under the Fed's control.

According to CME Fedwach, the March meeting will result in a 25 bps rate cut as the odds are 65% now! On the contrary, there's a 35% chance of no rate hike during the March 2023 meeting.

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