- Gold price continued to extend its weekly gains, above the $1,900 mark.
- Trader’s speculations that the US Federal Reserve would slow rate hikes pace boosted Gold prices.
- Gold Price Analysis: Daily close above $1,920 could pave the way toward $2,000.
Gold price hit a new 9-month high at $1,913.18 on Friday, amidst investors’ speculations that the US Federal Reserve (Fed) could shift to a less aggressive stance following the release of softer inflation data. Therefore, XAU/USD is trading at $1,912, gains 0.82%, headed for a fourth consecutive week of gains.
XAU/USD got bolstered by speculations of a less hawkish Fed, falling US bond yields
Global equities remain mixed, while Wall Street is headed for a soft opening. Earnings season began in the United States (US), with banks like Bank of America and JP Morgan topping expectations, while Wells Fargo missed estimates, as reported by Q4 results. Thursday’s US inflation report, which witnessed December’s Consumer Price Index (CPI) dropping beneath 7% and core CPI below 6%, was cheered by the financial markets.
In the meantime, the greenback is staging a recovery though it’s been ignored by Gold traders. The US Dollar Indexwhich tracks the buck’s value against a basket of peers, is trimming some of its weekly losses, gaining 0.18%, at 102.418.
Another reason bolstering XAU/USD’s recent price action is US Treasury bond yields. The 10-year benchmark note rate tumbles one bps, down at 3.434%, though it has fallen 12 bps in the week.
According to the CME FedWatch Tool, odds for a 25 bps rate hike by the Federal Reserve lie at a 94.2% chance after the release of US inflation.
Meanwhile, the University of Michigan’s Consumer Sentiment for January beat estimates of 60.5 and reached 64.6. Regarding consumer inflation expectations, for one year, it dropped from 4.4% to 4%, while for a 5-year horizon ticked to 3% from 2.9%.
Gold Price Analysis: Technical outlook
From a daily chart perspective, XAU/USD would likely continue to edge higher, as it has broken May 5, 2022, daily high of $1909.80. Oscillators like the Relative Strength Index (RSI) at overbought conditions but still beneath the 80 mark suggest the uptrend continues to gain strength. While the Rate of Change (RoC), portrays that buyers are gathering momentum.
Gold key resistance levels would be the April 29 high of $1,919.90, followed by April 18 at $1,998.39, slightly below $2,000.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
