US DOLLAR, PRICE FORECAST
XAUUSD
- The US dollar fell as yields fell following lower-than-expected US inflation data
- Gold prices hit key technical levels in both cases
US Treasury yields fell sharply on Tuesday after weaker-than-expected US consumer price index data reduced the likelihood of further tightening by the central bank and weakened its ability to keep interest rates at high levels for long periods of time.
The move in the fixed income space has left the broader US dollar reeling, with the DXY index falling more than 1.5%, its worst daily performance since November 2022. Against this backdrop, The euro and the British pound broke out to the top, hitting multi-week highs against the greenback.
Gold prices also posted solid gains and attempted solid consolidation, a bullish technical signal.
With traders declaring victory in the fight against inflation and predicting sharp interest rate cuts in 2024, recent market moves could gain traction and consolidate in the near term . This could mean further falls in yields and the US dollar, along with additional gains in precious metals and stocks.
TECHNICAL ANALYSIS
XAUUSD
After a few days of weakness, gold performed a bullish reversal on Tuesday, bouncing off cluster support at $1,940/$$1,950. If the price successfully builds on this upward momentum, initial resistance lies at $1,975/$1,980. A break above this ceiling could open the door for a rally to $2,010/$2,015.
Conversely, in case sellers regain control of the market, the main support level will extend from $1,950 to $1,940. While gold could establish a base within this range during a pullback, a break could set the stage for a drop to $1,920, followed by $1,900.
XAUUSD
- The US dollar fell as yields fell following lower-than-expected US inflation data
- Gold prices hit key technical levels in both cases
US Treasury yields fell sharply on Tuesday after weaker-than-expected US consumer price index data reduced the likelihood of further tightening by the central bank and weakened its ability to keep interest rates at high levels for long periods of time.
The move in the fixed income space has left the broader US dollar reeling, with the DXY index falling more than 1.5%, its worst daily performance since November 2022. Against this backdrop, The euro and the British pound broke out to the top, hitting multi-week highs against the greenback.
Gold prices also posted solid gains and attempted solid consolidation, a bullish technical signal.
With traders declaring victory in the fight against inflation and predicting sharp interest rate cuts in 2024, recent market moves could gain traction and consolidate in the near term . This could mean further falls in yields and the US dollar, along with additional gains in precious metals and stocks.
TECHNICAL ANALYSIS
XAUUSD
After a few days of weakness, gold performed a bullish reversal on Tuesday, bouncing off cluster support at $1,940/$$1,950. If the price successfully builds on this upward momentum, initial resistance lies at $1,975/$1,980. A break above this ceiling could open the door for a rally to $2,010/$2,015.
Conversely, in case sellers regain control of the market, the main support level will extend from $1,950 to $1,940. While gold could establish a base within this range during a pullback, a break could set the stage for a drop to $1,920, followed by $1,900.
