Gold Price Consolidates Gains
The XAU/USD (gold spot price) has witnessed a modest 0.55% decline, currently trading around $2,030. However, it’s important to note that this price level remains relatively high, reaching levels not seen since May.
US Yields Weakness Provides Support
Weakness in US Treasury bond yields is offering support to gold. The 2-year rate hovers at 4.40%, while the 5 and 10-year yields are at 3.85% and 3.84%, the lowest since July. Lower yields tend to reduce the opportunity cost of holding non-yielding metals like gold.
Awaiting Inflation Data
Market participants are anxiously awaiting Friday’s release of US Personal Consumption Expenditures (PCE) figures from November, a key inflation indicator favored by the Federal Reserve. The outcome could influence the gold market and impact expectations of potential rate cuts by the Fed in 2024.
Technical Indicators and Moving Averages
The daily Relative Strength Index (RSI) remains in positive territory, although it shows a negative slope. The Moving Average Convergence Divergence (MACD) histogram displays red bars, indicating underlying buying pressure, but their flat nature suggests a momentary pause in momentum.
On a broader scale, Simple Moving Averages (SMAs) support a bullish outlook. Notably, the pair is trading above the 20-day SMA, 100-day SMA, and 200-day SMA, indicating continued dominance by buyers in larger time frames.
Key Levels to Monitor
Support Levels: $2,020 (20-day SMA), $2,000, $1,980.
Resistance Levels: $2,040, $2,050, $2,070.