Gold price soars amid geopolitical tensions, Fed policy eyed

Fonte Fxstreet
  • Gold price delivers strong upside move as geopolitical tensions deepen.
  • Fed policy, labor market and Manufacturing PMI data for December will remain in the spotlight.
  • The Fed is expected to keep interest rates unchanged for the fourth straight time.

Gold price (XAG/USD) remains upbeat as mounting geopolitical tensions have improved the appeal of bullion. The precious metal attracts significant bids as the drone attack on US bases near northeastern Jordan has impacted market sentiment. In addition, a moderate increase in the U S Core Personal Consumption Expenditures (PCE) data for December has softened the inflation outlook.

This week, investors should brace for a high volatile action as the interest rate decision by the Federal Reserve (Fed) will be followed by the Institute of Supply Management (ISM) Manufacturing PMI and Nonfarm Payrolls (NFP) report for December. The Fed is widely anticipated to keep interest rates steady in the 5.25-5.50% range but fresh guidance on interest rates will be keenly watched. Investors would look for cues of whether Fed policymakers continue leaning towards keeping interest rates restrictive till June or are likely to signal a dovish decision for March or May. 

Daily Digest Market Movers: Gold price rallies on Middle East crisis 

  • Gold price discovers strong buying interest on Monday as investors rush for safe-haven assets due to deepening Middle East tensions.
  • The precious metal witnesses significant bets as geopolitical tensions mount after a drone attack on US service members stationed in northeastern Jordan.
  • Meanwhile, continued attacks on energy shipments in the Red Sea by Iran-backed-Houthis have disrupted the global supply chain.
  • This week, market participants will focus on the Federal Reserve’s first monetary policy announcement of 2024, which is scheduled for Wednesday.
  • As per the CME FedWatch Tool, investors are pretty confident that interest rates will remain unchanged in the range of 5.25-5.50% for the fourth straight time.
  • While major focus will be on the interest rate outlook. Traders see a higher probability of the Fed reducing interest rates from May as policymakers have been reiterating the need for maintaining restrictive interest rates for a longer period until they get convinced that inflation would come down to the 2% target in a timely manner.
  • The US Dollar Index (DXY) could come under pressure if the Fed signals that it could commence its rate-cutting campaign from March. 
  • A soft core PCE price index report for December, released on Friday, failed to uplift expectations of a rate-cut from March.
  • Monthly core PCE grew by 0.2% as expected while annual underlying inflation data decelerated to 2.9% against expectations of 3.0% and the former reading of 3.2%.
  • Apart from the Fed policy, it will be a volatile week as Manufacturing PMI, and ADP and official Employment data have lined-up for release.
  • But first, market participants will look for the US JOLTS Job Openings data, which will be published on Tuesday. This will indicate how strong the labor demand is despite interest rates remaining elevated.
  • Investors have anticipated that US employers posted fresh 8.75M jobs in December against 8.79M in November.

Technical Analysis: Gold price climbs to near $2,030

Gold price approaches the horizontal resistance of the Ascending Triangle chart pattern plotted from January 19 high at $2,039.50, on the two-hour timeframe. The upward-sloping border of the aforementioned pattern is plotted from the January 17 low near $2,002. The pattern has a bullish bias, suggesting a breakout higher will follow its completion. 

On a daily time frame, the precious metal continues to put efforts for sustainability above the 20-day Exponential Moving Average (EMA), which trades around $2,030.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Isenção de responsabilidade: Apenas para fins informativos. O desempenho passado não é indicativo de resultados futuros.
placeholder
Previsão do preço da prata: XAG/USD salta acima de US$ 76,50, com as tensões na Venezuela aumentando a demanda por refúgios segurosO preço da prata (XAG/USD) é negociado em território positivo perto de US$ 76,55 durante o horário de negociação asiático na terça-feira. O metal branco amplia sua alta devido aos fluxos de refúgio seguro após a captura do presidente venezuelano Nicolás Maduro pelos Estados Unidos (EUA).
Autor  FXStreet
1 Mês 06 Dia Ter
O preço da prata (XAG/USD) é negociado em território positivo perto de US$ 76,55 durante o horário de negociação asiático na terça-feira. O metal branco amplia sua alta devido aos fluxos de refúgio seguro após a captura do presidente venezuelano Nicolás Maduro pelos Estados Unidos (EUA).
placeholder
O ouro e a prata atingiram máximos históricos, mas ainda ficam atrás dos retornos plurianuais do BitcoinApesar da recente estagnação de preço em comparação com o crescimento do ouro e da prata, Bitcoin permanece à frente de ambos os metais preciosos em 331% combinados. O ouro e a prata estão atualmente em máximas históricas, acima de US$ 5.100 e US$ 110, respectivamente. Apesar disso e da atual consolidação de preço do Bitcoin, nenhum dos metais superou a taxa de crescimento da moeda. O BTC permanece à frente de […]
Autor  Cryptopolitan
1 Mês 29 Dia Qui
Apesar da recente estagnação de preço em comparação com o crescimento do ouro e da prata, Bitcoin permanece à frente de ambos os metais preciosos em 331% combinados. O ouro e a prata estão atualmente em máximas históricas, acima de US$ 5.100 e US$ 110, respectivamente. Apesar disso e da atual consolidação de preço do Bitcoin, nenhum dos metais superou a taxa de crescimento da moeda. O BTC permanece à frente de […]
placeholder
Previsão do preço das moedas meme: Dogecoin, Shiba Inu e Pepe quebram abaixo dos níveis críticos de suporteAs moedas meme, lideradas pela Dogecoin (DOGE), Shiba Inu (SHIB) e Pepe (PEPE), estão em baixa até agora nesta semana, prolongando o declínio predominante. A perspectiva técnica para DOGE, SHIB e PEPE reflete uma tendência de baixa, à medida que as moedas meme caem abaixo dos níveis de suporte importantes e as condições gerais do mercado se tornam mais voláteis.
Autor  FXStreet
18 horas atrás
As moedas meme, lideradas pela Dogecoin (DOGE), Shiba Inu (SHIB) e Pepe (PEPE), estão em baixa até agora nesta semana, prolongando o declínio predominante. A perspectiva técnica para DOGE, SHIB e PEPE reflete uma tendência de baixa, à medida que as moedas meme caem abaixo dos níveis de suporte importantes e as condições gerais do mercado se tornam mais voláteis.
placeholder
O ouro cai com o acordo de financiamento do governo impulsionando o dólar americano e levando à realização de lucrosO ouro (XAU/USD) está passando por uma forte liquidação pelo segundo dia consecutivo nesta sexta-feira, após um aumento parabólico de mais de 25% desde o início deste mês e uma série de recordes estabelecidos nas últimas duas semanas.
Autor  FXStreet
18 horas atrás
O ouro (XAU/USD) está passando por uma forte liquidação pelo segundo dia consecutivo nesta sexta-feira, após um aumento parabólico de mais de 25% desde o início deste mês e uma série de recordes estabelecidos nas últimas duas semanas.
placeholder
Previsão do preço do Ethereum: ETH ultrapassa brevemente US$ 2.700 em meio ao lançamento do Fundo de Segurança DAOO Ethereum está recebendo um reforço de segurança com o retorno do The DAO, quase uma década após o infame ataque hacker.
Autor  FXStreet
18 horas atrás
O Ethereum está recebendo um reforço de segurança com o retorno do The DAO, quase uma década após o infame ataque hacker.
Produtos relacionados
goTop
quote