The current price of XAU/USD is at 1,991.05, reflecting a stabilization in market sentiment after a period of risk-off movements following the release of US CPI data. The latest data from the United States has confirmed the Federal Reserve’s cautious stance. XAU/USD is currently in corrective mode, although it remains susceptible to downward pressure from bears.
Spot Gold experienced a decline on Wednesday, trading as low as $1,984.03, a level not seen since December of the previous year. However, XAU/USD managed to recover above the $1,900 threshold during the mid-American session due to a decrease in demand for the US Dollar and a more positive market mood. The positive sentiment was further supported by gains in the Wall Street indexes and a retreat in government bond yields from their recent peaks.
Global policymakers have been cautious about implementing a looser monetary policy despite market expectations. The macroeconomic data has also indicated tight labor markets and inflation levels above central banks’ target bands, particularly in the US. The surprise increase in January inflation, alongside a strong Nonfarm Payrolls report, diminished hopes for a rate cut in the near term.
Looking at the short-term technical outlook for XAU/USD, the daily chart reveals that the pair is trading near its opening after posting a lower low. Technical readings suggest a downside bias, with the 100 Simple Moving Average providing mild support. In the 4-hour chart, XAU/USD appears to be in a corrective phase, with technical indicators showing signs of potential upward movement despite being in oversold territory. However, bears are likely to maintain control and selling pressure could intensify upon approaching the $2,000 mark.
Additional Insight:
The recent trend in XAU/USD reflects the impact of macroeconomic data and policy decisions from global central banks, especially the Federal Reserve in the US. With inflation levels rising and labor markets remaining tight, there is uncertainty about the timeline for potential rate cuts. The technical outlook for XAU/USD indicates a bearish bias, but it will be important to monitor how market sentiment and economic data evolve to gauge the potential for further price movements. Additionally, geopolitical events and currency movements can also play a significant role in determining the future direction of XAU/USD.
