After Jerome Powell's statements, which calmed the pace of the US dollar's gains, the gold futures XAU/USD achieved lukewarm gains reaching the level of $1884 per ounce. This is a recovery from the fluctuation of the price of gold XAU/USD towards the support level of $1862 per ounce. This is its lowest since almost a month after the announcement of stronger-than-expected numbers for American jobs provided a wound for the future of policy tightening Central Bank of America. The price of gold stabilizes around the level of 1870 dollars per ounce at the time of writing the analysis.
During last week's trading, the gold price XAU/USD fell by more than 2%. However, with growing expectations that the Federal Reserve will cut interest rates later this year, gold prices have rebounded and are enjoying year-to-date gains in 2023.
The price of gold has risen by 2.6% so far this year 2023.
The prices of silver, the sister commodity of gold, maintain their downward trend. Stable around the level of $22.20 per ounce. The price of silver also came out of a sharp weekly loss of 6%, in addition to its decrease since the beginning of the year to date by about 8%. For their part, market analysts say that gold was suffering from an overbought condition in the first month of trading and was about to face a correction, with the US jobs report for January weighing on the precious metal.
With 517,000 new US jobs in January, there were broader concerns in the market that the Federal Reserve may continue to raise US interest rates to finish the job on inflation. Although recession is still the primary scenario in the Wall Street markets, the US central bank apparently believes it has room to push interest rates higher to ensure the death and burial of inflation.
The gold market is generally sensitive to a high interest rate environment because it raises the opportunity cost of holding the non-yielding bullion.
In general, the strong dollar has crowned the rise of gold. As the US Dollar Index (DXY) rose to 103.62, the index turned positive for the year, thanks to its 1.3% gain last week. A stronger US currency is bad for dollar-denominated goods because it makes dollar-denominated goods more expensive.
For other metals markets, copper futures fell to $4.0365 a pound. Platinum futures fell to $977.40 an ounce. Palladium futures fell to $1590.50 an ounce.
Today's XAU/USD Gold Price Predictions:
- According to the performance on the chart for the daily time frame below, the general trend of the gold price XAU/USD is still in a downward trend.
- The bears' control over the trend will strengthen with the continuation of the strength of the US dollar.
- This may bring it stronger support levels and the closest of which are currently 1855 and 1830 dollars, which confirms the change in the general trend to my descent.
On the other hand, and in the same period of time, the movement of the price of gold towards the resistance of $1885 per ounce will be important for the bulls to move towards the psychological resistance of $1900 per ounce again.
The gold market is not expecting important and influential economic data today, and therefore it will react to the price of the US dollar and how willing investors are to risk or not, along with the reaction from the statements of some of the policy officials of the American Federal Reserve Bank.
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