XAU/USD Current price: 2,065.44
The US Dollar strengthened as market players became cautious ahead of first-tier news. S&P Global reported that manufacturing output remained in contraction territory in December. XAU/USD is technically neutral in the near term, but looks poised to resume its advance. Spot Gold traded uneventfully around its daily opening and was unable to find a clear direction after falling for two consecutive days.
Investors are cautious following a long weekend and ahead of first-tier figures scheduled throughout the week, focusing mainly on United States (US) employment-related data. The sentiment soured following the release of the US S&P Global Manufacturing PMI, which was worse than anticipated.
US stocks traded in the red, while government bond yields ticked north, reflecting fresh concerns. It seems the market is reconsidering the aggressive betting on upcoming rate cuts among major economies. The macroeconomic calendar will include updates on European inflation this week.
In terms of the technical outlook for XAU/USD, the daily chart indicates additional recoveries despite limited directional momentum. The pair is above all its moving averages, with technical indicators aiming north within positive levels.
On the 4-hour chart, XAU/USD is neutral with the pair above mildly bullish moving averages. Technical indicators reflect the absence of a particular interest, but gold can resume its advance on a break through $2,079.00.
Support levels: 2,055.80, 2,046.10, 2,032.00
Resistance levels: 2,079.00, 2,088.50, 2,100.00
Insight: Despite the cautious sentiment among investors, the technical indicators and moving averages suggest the potential for gold to resume its advance in the near term. The US Dollar’s strength and concerns about upcoming rate cuts among major economies are contributing to the current market dynamics. Furthermore, the focus on US employment-related data and European inflation updates will provide additional insight into the market’s direction in the coming days.
