Gold prices are firming, reaching their highest since May 5, as traders wait for the US PCE price index, a key inflation indicator. Upcoming data could influence Fed policy, influence US dollar demand, and indicate the direction of gold. Greenback has seen some position changes and is slowly recovering in the face of data risks. Strong U.S. stock futures are a headwind for gold, but there is increasing speculation that the Federal Reserve could cut interest rates in March 2024, potentially limiting any significant dollar strength. Amid concerns about China’s economy, gold supports this delicate market scenario.
XAUUSD – D1 timeframe
As seen in the attached chart showing the daily timeframe for XAUUSD (gold), price appears to be creating a head and shoulders pattern with an initial rejection from the 88% Fibonacci retracement level. Based on this, we expect the bullish rally to pause, at least until the price reaches his 50% Fibonacci level.
XAUUSD – H4 timeframe
On the 4-hour time frame, a more cautious approach is to wait for a break and retest of the trendline shown in the chart above. After that, we can consider a bearish trend in motion.
Analyst predictions:
- Direction: Bearish
- Goal: 1950.77
- Disable: 2053.42
conclusion
Trading CFDs involves risk. Success requires proper management of risk. When looking to trade these opportunities, be sure to do your due diligence and manage your risks properly to avoid costly mistakes.