The spot gold market is currently consolidating without a clear short-term direction, as the upward trend faces resistance at $2,040 and lower treasury bond yields limit the downside. The positive momentum from the retreat from the all-time high near $2,130 still indicates signs of resilience.
The sharp decline in XAUD/USD has inflicted damage, and the scars remain visible. However, on a positive note, the price has managed to avoid further losses, indicating the possibility of continued consolidation. Fundamentally, the sideways movements reflect market confidence that the Federal Reserve (Fed) will not raise interest rates and may consider rate cuts in 2024, following other central banks' monetary policy easing. While this may be negative for the US Dollar, fundamental factors still position it as one of the strongest among G10 currencies when considering GDP growth and prospects.
For Gold to continue its upward trajectory, there seems to be a need for some weakness in the US Dollar. Additionally, yields are expected to steer clear of any significant recovery. This backdrop could bring Gold closer to record highs at some point. Data from the US on Thursday showed mixed results, with a notable decrease in initial jobless claims continuing after a sharp increase the previous week. The focus now shifts to the Non-Farm Payrolls (NFP) report on Friday, with an expected increase of 180,000 jobs. The following week features the FOMC meeting, and on Tuesday, the US Consumer Price Index will be released.
The sharp decline in XAUD/USD has inflicted damage, and the scars remain visible. However, on a positive note, the price has managed to avoid further losses, indicating the possibility of continued consolidation. Fundamentally, the sideways movements reflect market confidence that the Federal Reserve (Fed) will not raise interest rates and may consider rate cuts in 2024, following other central banks' monetary policy easing. While this may be negative for the US Dollar, fundamental factors still position it as one of the strongest among G10 currencies when considering GDP growth and prospects.
For Gold to continue its upward trajectory, there seems to be a need for some weakness in the US Dollar. Additionally, yields are expected to steer clear of any significant recovery. This backdrop could bring Gold closer to record highs at some point. Data from the US on Thursday showed mixed results, with a notable decrease in initial jobless claims continuing after a sharp increase the previous week. The focus now shifts to the Non-Farm Payrolls (NFP) report on Friday, with an expected increase of 180,000 jobs. The following week features the FOMC meeting, and on Tuesday, the US Consumer Price Index will be released.
