💡 XAUUSD: Strong increase due to weak USD

➡️ Gold held its ground in the final trading session of the week, securing its second consecutive weekly gain. The upswing in gold prices was driven by a softening dollar, with analysts increasingly speculating that the US Federal Reserve (Fed) had concluded its interest rate hike. The decline in the US Dollar Index renders gold more affordable for holders of alternative currencies.

➡️ Senior analyst Lukman Otunuga from FXTM noted that gold has entered a holding pattern as investors anticipate further insights into the Fed's monetary policy stance. Hovering around the $2,000 per ounce mark, gold is currently seeking a catalyst to strengthen its momentum.

➡️ Recent data revealing a larger-than-expected decrease in new unemployment claims among Americans last week tempered expectations for a Fed rate cut in 2024.

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Stronger-than-expected jobs data does not change the view that the US labor market is slowing amid higher interest rates, experts said.

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Earlier this week, minutes of the monetary policy meeting said the Fed emphasized that the US Central Bank would be "careful" in policy decisions and that "all participants assessed maintaining" the level Current interest rates are appropriate. Traders expect the Fed to keep interest rates unchanged in December, while pricing in a roughly 26% chance of the Fed cutting interest rates as early as March next year.

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Commerzbank in a note expressed that: “All in all, the latest economic data is quite disappointing.” Commerzbank expects the first rate cut to be made in mid-2024, so only then is gold prices likely to make a sustained rise above $2,000.

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Co-head of commercial hedging Sean Lusk of Walsh Trading said that the market is under the illusion that the US Federal Reserve is about to cut interest rates. However, this expert does not expect to see a decline in gold in the near future when the market enters the seasonal period.

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Gold increased to a 4-week high of 2018

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Gold prices increased slightly in the weekend session, but that move did not bring any significant changes. But this morning, buying power returned strongly and broke the important 2010 resistance level, creating a new peak, showing that the upward momentum could continue. Please wait patiently to see if the daily candlestick closes above the 2010 level. If so, then we should consider buying positions, targeting the all-time high price around the 2070-2080 threshold.

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