GOLD| Time to evaluate a short entry!
Analyzing XAU/USD, we can outline a detailed picture of the current situation and future prospects:
Current Situation:
Gold is struggling to make a decisive move in any specific direction mid-week.
After rising above $2,030, gold lost momentum and retreated towards $2,020.
The markets are awaiting the outcome of the 10-year US Treasury note auction.
Macro Factors and Upcoming Events:
A sparse macroeconomic calendar and upcoming top-tier events are keeping investors in cautious mode.
Wall Street opened positively, attempting to reverse some of its recent losses, but trading remains uneventful.
Influence of US Inflation Data:
The US Consumer Price Index (CPI) for December, set to be released on Thursday, could significantly impact gold prices.
An annual CPI increase of 3.2% is expected, slightly higher than the previous 3.1%, but the core CPI increase is expected to decline.
Market Expectations Regarding the Fed:
Market participants are betting that the Federal Reserve (Fed) might start cutting rates as early as March.
This expectation is due to decreasing inflationary pressures, despite recent data showing a tight labor market.
Recent Price Dynamics:
Gold price (XAU/USD) saw a pause in its recovery on Wednesday, with investors focusing on US inflation data.
The gold price recovery is expected to be short-lived due to investor confidence that the Fed will begin rate cuts starting in March.
Technical Analysis:
Gold price is aiming for stability above $2,030.
It found intermediate support after correcting more than 3% from the high of December 28, 2023, around $2,090.
Short-term demand for gold is no longer bullish, with the 20-day Exponential Moving Average (EMA) around $2,038 acting as a strong barrier.
The broader trend remains bullish, with the 50- and 200-day EMAs sloping upwards.
Further downside may occur if gold falls below the three-week low around $2,016.
External Factors and Future Indications:
The 10-year US Treasury yields have dropped to near 4.04% in anticipation of inflation data.
The options market is showing signs of hedging against a negative outcome.
Remarks by the President of the New York Federal Reserve, John Williams, could further influence gold prices.
Conclusion:
Currently, gold prices are influenced by a combination of expectations about the Fed's interest rates, US inflation data, and market sentiment. The future direction of the price will likely be determined by upcoming inflation data and Fed policies. My personal expectation is the 62% Fibonacci level at 1966.
Current Situation:
Gold is struggling to make a decisive move in any specific direction mid-week.
After rising above $2,030, gold lost momentum and retreated towards $2,020.
The markets are awaiting the outcome of the 10-year US Treasury note auction.
Macro Factors and Upcoming Events:
A sparse macroeconomic calendar and upcoming top-tier events are keeping investors in cautious mode.
Wall Street opened positively, attempting to reverse some of its recent losses, but trading remains uneventful.
Influence of US Inflation Data:
The US Consumer Price Index (CPI) for December, set to be released on Thursday, could significantly impact gold prices.
An annual CPI increase of 3.2% is expected, slightly higher than the previous 3.1%, but the core CPI increase is expected to decline.
Market Expectations Regarding the Fed:
Market participants are betting that the Federal Reserve (Fed) might start cutting rates as early as March.
This expectation is due to decreasing inflationary pressures, despite recent data showing a tight labor market.
Recent Price Dynamics:
Gold price (XAU/USD) saw a pause in its recovery on Wednesday, with investors focusing on US inflation data.
The gold price recovery is expected to be short-lived due to investor confidence that the Fed will begin rate cuts starting in March.
Technical Analysis:
Gold price is aiming for stability above $2,030.
It found intermediate support after correcting more than 3% from the high of December 28, 2023, around $2,090.
Short-term demand for gold is no longer bullish, with the 20-day Exponential Moving Average (EMA) around $2,038 acting as a strong barrier.
The broader trend remains bullish, with the 50- and 200-day EMAs sloping upwards.
Further downside may occur if gold falls below the three-week low around $2,016.
External Factors and Future Indications:
The 10-year US Treasury yields have dropped to near 4.04% in anticipation of inflation data.
The options market is showing signs of hedging against a negative outcome.
Remarks by the President of the New York Federal Reserve, John Williams, could further influence gold prices.
Conclusion:
Currently, gold prices are influenced by a combination of expectations about the Fed's interest rates, US inflation data, and market sentiment. The future direction of the price will likely be determined by upcoming inflation data and Fed policies. My personal expectation is the 62% Fibonacci level at 1966.
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