Gold Strengthens Near Six-Month Highs Amid Fed Rate Cut Speculat
The price of gold (XAU/USD) has surpassed the horizontal resistance level at $2,008-$2,010 and advanced to the $2,018 zone on Monday, marking its highest level since mid-May. The precious metal seems to have entered a phase of consolidating gains, fluctuating just below the mentioned region as it enters the European trading session on Tuesday. Weaker-than-expected U.S. consumer inflation data released two weeks ago has sparked speculation about the Federal Reserve's (Fed) pause in its tightening monetary policy cycle. Moreover, markets have priced in the possibility of interest rate cuts in 2024. This, in turn, pushed the U.S. Dollar (USD) to its lowest level in nearly three weeks, supporting the recent uptrend of this commodity from below $1,950 or the monthly low touched on November 13.
Additionally, concerns about global economic slowdown, which tends to benefit traditional safe-haven assets, confirm the short-term positive outlook for gold. That said, a positive sentiment around the Asian stock markets plays the role of a headwind for the precious metal. Bullish traders also seem reluctant to place positive bets and prefer to wait for the release of the Personal Consumption Expenditures (PCE) Index from the United States to have some meaningful catalyst. Meanwhile, the publication of the Conference Board's Consumer Confidence Index and speeches by FOMC members could create short-term trading opportunities later on Tuesday. However, the short-term fundamental backdrop appears to lean heavily toward bullish traders.
Additionally, concerns about global economic slowdown, which tends to benefit traditional safe-haven assets, confirm the short-term positive outlook for gold. That said, a positive sentiment around the Asian stock markets plays the role of a headwind for the precious metal. Bullish traders also seem reluctant to place positive bets and prefer to wait for the release of the Personal Consumption Expenditures (PCE) Index from the United States to have some meaningful catalyst. Meanwhile, the publication of the Conference Board's Consumer Confidence Index and speeches by FOMC members could create short-term trading opportunities later on Tuesday. However, the short-term fundamental backdrop appears to lean heavily toward bullish traders.
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