● Gold prices consolidate near weekly highs despite a slight USD rebound and which coin will reach and in 2030improved risk appetite.
● The Fed's dovish tilt continues to support bullish sentiment for the precious metal.
● Traders await US economic data for fresh directional cues amid mixed market signals.
Gold (XAU/USD) showed limited movement during Wednesday's Asian session after posting gains earlier in the week. The metal currently hovers around the $2,040 level, with market participants weighing competing fundamental factors following last week's significant Fed policy shift.
The Federal Reserve's updated projections signaled the end of its tightening cycle, with policymakers anticipating potential rate cuts in 2024. This development pushed Treasury yields to multi-month lows, creating favorable conditions for non-interest-bearing assets like gold.
However, recent cautious comments from Fed officials have tempered market enthusiasm. Combined with modest dollar strength and global equity market gains, these factors have prevented more substantial gold price appreciation in the short term.
Market attention now turns to upcoming US economic releases, particularly Friday's Core PCE Price Index - the Fed's preferred inflation gauge. This data could significantly influence monetary policy expectations and gold's near-term trajectory. Meanwhile, Wednesday's Consumer Confidence Index may provide interim trading signals.
Fed Policy Expectations Continue to Drive Gold Market
The precious metal maintains support from growing market conviction that the Fed will begin easing monetary policy in early 2024, despite recent pushback from central bank officials.
Recent remarks from regional Fed presidents have emphasized data dependence and cautioned against overinterpreting the December dot plot. However, futures markets continue pricing in substantial rate cuts next year, with the first expected as early as March.
These expectations have kept 10-year Treasury yields below 4% and the dollar near recent lows, maintaining gold's appeal as an alternative asset. The metal's performance remains constrained, however, by improved risk sentiment across global markets.
Investors continue monitoring economic indicators for confirmation of the Fed's policy path, with particular focus on inflation metrics and labor market data in coming weeks.
Technical Outlook: Key Levels to Watch for Gold's Next Move
From a chart perspective, gold's ability to sustain above $2,040 suggests underlying strength, with the $2,047-2,048 zone representing immediate resistance. A decisive break above this barrier could open the path toward $2,072-2,073 and potentially the psychological $2,100 level.
On the downside, $2,018-2,017 now serves as important support, followed by the $2,000 handle. A sustained move below this area might trigger technical selling toward the 50-day SMA near $1,988-1,989, with additional support around last week's low near $1,973.
The 200-day SMA, currently positioned around $1,957, would come into focus on any extended decline. Market participants will watch these technical levels closely alongside fundamental developments for gold's next significant move.
