XAU/USD Fluctuates as Gold Price Pulls Back from $2,070 Ahead of Holiday Season

• Gold pulls back after ⁢testing $2,070 ahead of⁣ Friday’s pre-holiday close.
• Rising investor bets of⁢ faster, more frequent Fed rate‌ cuts squeeze Gold higher.
• US⁢ inflation continues to cool off,‍ Treasuries ease back amidst risk appetite recovery.

The price of ‌Gold briefly tested above‍ the $2,070 mark on Friday before retreating towards the day’s opening bids. The Federal Reserve’s main interest rate currently at a 22-year high has triggered great interest in the market for rate cuts from the Fed, with decreasing US inflation fueling the hopes of investors for a quicker pace of Fed rate cuts. ‌

In November, the US⁢ Annualized Core ⁣Personal Consumption Expenditures (PCE) Price Index grew by 3.2% from the same time last year, which was slightly below market‍ forecasts of ​3.3% and was also a decrease from the previous period’s 3.4%.

Market participants ‍are hoping for continued Fed rate cuts due to the softening ‌of US ​inflation, which ⁣has led to decreased pressure on the US Dollar and increased demand for Spot Gold. However, there is concern that the market expectations of rate cuts may be too high; while the Fed’s dot⁣ plot of interest rate projections shows‍ a median‌ forecast of 75 basis points in rate cuts by the end of 2024. ⁤Market bets price in 160 ⁢basis⁤ points in cumulative rate cuts, with some even ⁣anticipating a rate cut as early as next March.

As the last full trading week of 2023 comes to an end and the markets ‌prepare for the holiday ⁤market break, ‌Friday’s early trading session saw a significant reversal as the US Dollar rebounded from losses and Gold returned to the day’s opening bids level.

XAU/USD Technical Outlook

On Friday, Spot Gold surged⁣ over 1.10% before pulling back⁤ near $2,050 after hitting $2,070. The XAU/USD pair has been showing strong upward momentum, surpassing the 200-hour Simple Moving Average (SMA) ​in recent sessions, and establishing a⁢ pattern of higher lows since early October. The near-term support for the XAU/USD pair is at the 200-day SMA around $1,960, indicating a bullish trend which ‍would need to fall below the $2,000 handle to establish a bearish ⁤pattern.

XAU/USD Hourly Chart

XAU/USD Daily Chart

XAU/USD Technical Levels

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.

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