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Gold attracts some dip-buying amid a softer risk tone and a modest USD downtick. The fundamental backdrop favours bulls and supports prospects for further gains. Breakout through a short-term trading range is needed to reaffirm the positive bias. Gold price (XAU/USD) regains positive traction on Thursday and reverses a major part of the previous day’s downfall amid the underlying bearish sentiment surrounding the US Dollar (USD). Growing acceptance that the Federal Reserve (Fed) will pivot away from its hawkish stance and start cutting interest rates as early as March 2024 drag the US Treasury bond yields to a multi-month low. In fact, the yield on the benchmark 10-year US government bond drops to its lowest level since July and undermines the Greenback, benefitting the US Dollar-denominated commodity. Apart from this, a softer risk tone around the equity markets is seen as another factor driving haven flows towards the precious metal. Meanwhile, the prospect of a global rate-cutting cycle suggests that the path of least resistance for the non-yielding Gold price remains to the upside. The median forecast in Federal Open Market Committee (FOMC) members’ Summary of Economic Projections has the federal-funds rate ending 2024 at 4.6%, signalling three 25 basis… Read More »Gold Price Forecast: XAU/USD consolidates in a familiar range before the next leg up

AUD/USD Current Price: 0.6765 The US Dollar continues to face pressure as Santa’s rally persists. The AUD/USD attained new monthly highs but experienced a loss of momentum. The next target is at the 0.6800 area, while the immediate key support is at 0.6730. The AUD/USD reached its peak on Wednesday at 0.6778, marking the highest intraday level in almost five months, before experiencing a modest pullback. The pair is maintaining its recent gains supported by a positive risk appetite and a weaker US Dollar. The Greenback continues to be affected by market participants reassessing positions after last week’s FOMC meeting. Economic data from the US released on Wednesday showed the CB Consumer Confidence rising to a five-month high in December at 110.7. Additionally, Existing Home Sales rebounded from a five-month decline, reaching an annual rate of 3.82 million, surpassing the market consensus of 3.77 million. However, these economic figures did not aid the Dollar’s performance. On Thursday, market participants will closely scrutinize the Jobless Claims data and the Philly Fed. Also scheduled is a new estimate of Q3 GDP (old news). On Friday, the Federal Reserve’s preferred gauge of inflation, the Core Personal Consumption Expenditure (Core PCE), is due. Incoming… Read More »AUD/USD Forecast: Pointing to 0.6800 as the US Dollar remains weak

XAU/USD Current price: 2,032.97 Upbeat US data provided modest support to the US Dollar. United Kingdom inflation eased further in November, boosting the market’s mood. XAU/USD retreats from its weekly high, holds well above $2,000. Spot Gold trades marginally lower on Wednesday, confined to Tuesday’s range. The US Dollar gathered some strength at the beginning of the day, while United States (US) data released after Wall Street’s opening provided additional support to the USD against safe-haven rivals. The US reported that CB Consumer Confidence improved to 110.7 in December from a downwardly revised 101.0 in November while beating the 104.6 forecast.  XAU/USD eased from an intraday high of $2,043.57, and changes hands near its daily low of $2,029.46. Financial markets recovered their optimism mid-European morning, as the United Kingdom reported that inflation in the country eased further in November. The Consumer Price Index (CPI) declined by 0.2% MoM while increasing 3.9% from a year earlier, below expectations of a 4.4% advance. On Tuesday, Canada reported the November annual CPI at 3.1%, unchanged from its previous reading, but slightly above the 2.9% forecast. Investors still await the United States (US) Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (FED) favourite… Read More »Gold Price Forecast: XAU/USD eases within range, awaits US inflation gauges

EUR/USD Current price: 1.0938 The US Dollar gains ground despite Treasury yields retreating further. US and EU Consumer Confidence stand out in an otherwise quiet American session. EUR/USD gains bearish traction in the near term, could fall through 1.0900. The US Dollar is in better shape on Wednesday, advancing against most major rivals. EUR/USD eased from its weekly peak at 1.0987 and trades in the 1.0930 region, with the market’s volatility limited ahead of the winter holidays and a United States (US) inflation update. The USD advances despite Treasury yields continuing to retreat. The 10-year note offers 3.87% ahead of the opening, down 5 basis points (bps) and at fresh multi-week lows. Meanwhile, the 2-year note yield shed 7 bps at 4.36%. Meanwhile, the Eurozone released minor figures. The October seasonally adjusted Current Account posted a surplus of €33.8 billion, better than the €31.2 billion from September. Also, Construction Output in the same month declined 1% MoM, worsening from the previous 0.9% advance. The EU will later release the preliminary estimate of December Consumer Confidence, while the US will publish December CB Consumer Confidence and November Existing Home Sales. It is worth adding that the USD also benefited from the… Read More »EUR/USD Forecast: Near-term sellers could push the pair towards 1.0880

EUR/USD holds steady near 1.0950 after Tuesday’s rally. The pair’s recent action highlighted the strength of 1.1000 resistance. The technical outlook for the short term remains bullish. EUR/USD rose sharply but lost its bullish momentum after coming within a touching distance of 1.1000. The pair stays relatively quiet and fluctuates at around 1.0950 mid-week, while the technical outlook suggests that the bullish bias remains intact.  The renewed selling pressure surrounding the US Dollar (USD) triggered a rally in EUR/USD in the second half of the day on Tuesday. The positive opening in Wall Street, combined with retreating US Treasury bond yields, made it difficult for the USD to find demand despite the better-than-expected Housing Starts data. Early Wednesday, soft inflation data from the UK revived expectations for a Bank of England rate cut in the first half of next year and caused Pound Sterling to suffer heavy losses against its rivals. Although the USD managed to capture some of the capital outflows, the Euro also attracted investors, with EUR/GBP rising to a fresh three-week high above 0.8650.

Gold price is consolidating its two-day upswing near $2,050 early Wednesday. The US Dollar nurses losses with US Treasury bond yields despite less dovish Fedspeak. Gold price defended 21-day SMA support, and eyes a sustained break above $2,050. Gold price is catching a breather near $2,040 early Wednesday, having tested multi-day highs at $2,048 on Tuesday. The US Dollar (USD) is licking its wounds in tandem with the US Treasury bond yields, keeping Gold buyers hopeful.   Gold price shrugs off Fedspeak, as dovish Fed pivot underpins Even though the US Federal Reserve (Fed) policymakers are trying their best to push back against expectations of potential interest rate cuts next year, the market’s pricing for rate reductions remains unchanged, with odds for a March Fed rate cut seen at around 75% while a May cut is almost a done deal. Sustained bets of a dovish Fed pivot in 2024 continue to undermine the US Treasury bond yields and the US Dollar amid a relatively data-light week. Therefore, all eyes stay focused on Friday’s US Core PCE Price Index, the Fed’s preferred inflation gauge, for cementing bets for a March rate cut. Softer Core PCE inflation data could bolster March rate cut… Read More »Gold Price Forecast: Will XAU/USD recapture key $2,050 resistance?

AUD/USD Current Price: 0.6762 The AUD/USD broke higher on Tuesday as the Santa Claus rally continues. The US Dollar remains under pressure, with the DXY approaching recent lows. Commodity prices maintain a positive short-term trend. The AUD/USD broke above 0.6730, boosted by a weaker US Dollar, and jumped to 0.6774, reaching the highest level since late July. Equity markets continue to rally, providing support to Antipodean currencies. The Reserve Bank of Australia (RBA) released the minutes from its latest meeting, where they decided to keep the key interest rate steady at 4.35%. The document showed that they considered raising interest rates but ultimately chose to keep them unchanged, with members opting to wait for further data. The market still anticipates rate cuts by the RBA next year. The “hawkish” minutes had a minor impact in boosting the Aussie. The key driver on Tuesday was the weakening US Dollar across the board, driven by risk appetite and lower Treasury bond yields. The Dow Jones is heading for another record close, and commodity prices continue to rise. Treasury yields maintain a negative trend. This context favors the upside in AUD/USD. Several Federal Reserve (Fed) officials presented their views, indicating that interest rate… Read More »AUD/USD Forecast: Potential for more gains, strong resistance around 0.6800

MARKETS Following an initial surge early in the session, U.S. stocks maintained a strong performance, with the S&P 500 steadily grinding toward record territory. Notably, the Dow achieved another record high, contributing to the overall impressive showing on the broader New York ticker tape. Without a tablespoon of doubt, investors are encouragingly acknowledging that inflation has experienced a notable decline across most major economies from the peak observed last year. Notably, this has occurred without the need for a recession. The United States and most G10 economies outperformed expectations in 2023, and despite this positive economic performance, inflation followed a favourable downward trajectory, confounding many Fed critics.  The welcome retreat in headline inflation, with Personal Consumption Expenditures (PCE) assuredly in tow, is now laying the groundwork for potential interest rate relief in 2024—a point underscored by last week’s decision by the Federal Open Market Committee (FOMC). Consequently, financial markets are currently basking in anticipation of a more festive holiday season, revelling in the optimism of profitable Santa Rally cheer. Indeed, The Federal Reserve seems ready to offer relief in the coming year, signalling the likelihood of at least three rate reductions in 2024. And the bond markets are promptly off… Read More »Asia open insights: Without a tablespoon of doubt, navigating market dynamics

XAU/USD Current price: 2,041.64 US Treasury yields continue to retreat, with the 10-year note offering its lowest since July. Focus remains on the US Core Personal Consumption Expenditures (PCE) Price Index. XAU/USD advances towards $2,050 with room to extend gains beyond the level. Gold trades with a better tone on Tuesday, helped by the broad US Dollar’s weakness. XAU/USD changes hands around $2,0403, approaching the high posted last week at $2,047.90. The positive tone of equities reflects persistent risk appetite, undermining demand for the American currency. Wall Street extends weekly gains, with the Nasdaq Composite reaching record highs for a third consecutive session, in line with central banks-inspired relief. Adding pressure on the USD, Treasury yields resumed their slides. The 10-year government bond offers 3.90% at the time being, its lowest since late in July, while the 2-year note yields 4.43%, holding near the multi-month low posted last week at  4.28% and down 2 basis points (bps) on the day. The United States (US) macroeconomic calendar had little to offer. The country unveiled November Building Permits, which declined by 2.5% MoM and Housing Starts, which rose 14.8% in the same month. Speculative interest awaits the US Federal Reserve’s (Fed) favorite… Read More »Gold Price Forecast: XAU/USD aims to extend gains beyond $2,050.00

EUR/USD Current price: 1.0956 The Eurozone confirmed the Harmonized Index of Consumer Prices at 2.4% YoY in November. Market participants remain optimistic ahead of inflation updates from major economies. EUR/USD is technically bullish, although the momentum is limited. The EUR/USD pair extends its modest weekly advance on Tuesday, as the US Dollar remains unattractive in the post-central banks’ scenario, with investors looking for better options. Wall Street ended in positive territory on Monday, with the Nasdaq Composite reaching record highs amid persistent optimism. However, the absence of relevant macroeconomic data maintains most major pairs confined within familiar levels, with EUR/USD currently hovering around 1.0950. European Central Bank (ECB) officials delivered some comments. On the one hand, Andrea Enria, chairperson of the European Banking Authority, noted that there are still significant uncertainties and downside risks for Eurozone banks. On the other hand,  Governing Council member Gediminas Simkus said rate cut expectations are too optimistic, adding investors may have gotten ahead of themselves. Finally, Governing Council member and Bank of France President  Francois Villeroy de Galhau stated the central bank will not raise interest anymore. The comments did not impact the Euro, as they put nothing new on the table. Meanwhile, the… Read More »EUR/USD Forecast: Bulls aiming to recover the 1.1000 threshold