Gold declines to fresh multi-week lows near $2,020
FUNDAMENTAL OVERVIEW:
After a subdued Asian session, Gold faced renewed selling pressure, dropping to its lowest point in almost three weeks, below $2,020. The 10-year US Treasury bond yield, sustained above 4% following a rally driven by Friday’s NFP, exerts downward pressure on XAU/USD.
XAU/USD remains relatively stable around the $2,040 mark on Thursday, moderating its earlier advances during the American session. The US Dollar faced slight pressure late on Wednesday due to mixed data from the United States (US) and the release of the FOMC Meeting Minutes. In the mid-December meeting, Federal Reserve (Fed) Chair Jerome Powell indicated the consideration of rate cuts, yet the Minutes offer no insight into the timing, only acknowledging the possibility in 2024.
Gold experienced a lackluster beginning to 2024, mirroring the robust recovery of the dollar as traders tempered expectations of an imminent rate cut by the Fed in March. This sentiment was amplified by Friday’s nonfarm payrolls data, which revealed labor market resilience, providing the Fed with additional flexibility to maintain higher rates. Profit-taking also weighed on gold after a substantial surge in December, concluding the year with over 10% in gains.
GOLD TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Gold is currently trading within an up channel.
Gold is positioned below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 2041.00
Immediate support level: 2025.91
HOW TO TRADE GOLD
After a significant price surge, Gold encountered a halt in its upward movement, consolidating within a range. Subsequently, it faced rejection from a resistance level, initiating a decline. Currently, Gold is trading in proximity to its support zone, and a breach of this support level could lead to further declines.
TRADE SUGGESTION- STOP SELL– 2020.11, TAKE PROFIT AT- 1977.18, SL AT- 2049.12.