FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
91%
HFM information and reviews
HFM
89%

XAUUSD: Weekly Review 16-20 January 2023


17 January 2023

Gold jumped to start 2023 with strong gains, as the positive momentum from December carried over into the new year. Last year’s headwinds, particularly the strengthening Dollar and Yields are starting to reverse, so 2023 is likely to be more friendly to the yellow metal. According to data released by the US Bureau of Labor Statistics, US consumer prices fell to 6.5% in December from November’s 7.1%, giving hope that the US Fed’s strategy to tame inflation is working and the US Fed will also take a softer policy in its rate hike approach. Slowing inflation means less aggressive rate hikes by the Fed. As per the CME Fed surveillance tool, the probability of a 25-bps hike at the February FOMC meeting has risen to 92.7 per cent.

Weakening Dollar, recession fears and geopolitical uncertainty could boost demand. The global economy is likely to go through tough times, as a result of cost of living crisis and slowdown in major economies. In addition, China’s economic growth, which is likely to pick up this year due to a number of easing measures, could fuel demand for the yellow metal. Following a sharp rise in central bank demand for Gold in the third quarter of 2022, the outlook for official sector demand for the yellow metal is likely to hold in 2023 as well.

Concerns over weaker global economic growth and geopolitical tensions will continue to make Gold valuable as a hedge against uncertainty. During the first three quarters of last year, the World Gold Council reported official sector purchases of 673 tonnes, higher than any full year since 1967. Added to that was a total of 62 tonnes purchased in November and December from the PBOC. Part of that demand was fuelled by a handful of central banks looking to reduce their dollar exposure. This de-dollarisation and general appetite for gold will ensure another year of official sector gold purchases that are likely to be stronger.

Technical Review

Speculative technical buying seems to be the main driver for Gold at the moment, led by continued demand from hedge funds that turned net buyers in early November, as the triple bottom signalled a change from the prevailing strategy of selling Gold at signs of strength. In the short-term, Gold looks increasingly in need of a correction with the risk underpinned by lower physical demand; while traders get used to higher prices.

XAUUSD hasn’t shown any fading rally momentum since early November, and January’s surge has seen that gap widen, but with RSI signalling overbought conditions, a correction towards the downside for price neutralisation can’t be ruled out.

XAUUSD, Daily

XAUUSD, Daily

Last week, XAUUSD recorded a high of 1,921.87 adding more than +5% gains since January this year. The price is seen at a resistance level seen since June 2021. Further upside is likely to test the 76.8% retracement level around 1,964.00 price along with the past resistance zones seen around November 2020 and January 2021. While on the downside, the main foothold is at 1,879.00 resistance which is now support and a strong level is seen at 1,807.78, or at least back to the January 2023 opening price around 1,825.00, in case of a strong correction.

#source

Share: Tweet this or Share on Facebook


Related

XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP
XAU/USD retreats from multi-month top amid modest USD recovery, ahead of US GDP

Gold price pulls away from a fresh multi-month top amid a modest US Dollar strength. Bets for smaller rate hikes by Federal Reserve, recession fears should help limit losses...

26 Jan 2023

Microsoft: Still Trapped Within Descending Channel
Microsoft: Still Trapped Within Descending Channel

Microsoft Corp., an American multinational technology conglomerate currently ranked the third largest company by market capitalization ($1.728T) which actively engages...

24 Jan 2023

Same story new week
Same story new week

Chinese New Year celebrations – many centres are closed in Asia. Treasuries sagged to end on a bearish week. USDIndex at 101.30 low as the market continued...

23 Jan 2023

EUR is stuck consolidating
EUR is stuck consolidating

EURUSD is going to consolidate. The current quote is 1.0810. In the nearest future the EUR might experience some local pressure because the weather in Europe has changed...

20 Jan 2023

EURGBP Fails To Break 0.89
EURGBP Fails To Break 0.89

In today’s European session, Germany’s final CPI rate for December registered 8.6% on an annual basis, in line with market expectations and the previous value...

18 Jan 2023

JP Morgan Chase & Co Starting 2023 Strong
JP Morgan Chase & Co Starting 2023 Strong

Shares in JP Morgan Chase & Co (symbol JPM) steadily rose last quarter, with the price regaining small losses. JPM is expected to release...

16 Jan 2023


Editors' Picks

FXCM information and reviews
FXCM
87%
ActivTrades information and reviews
ActivTrades
86%
RoboForex information and reviews
RoboForex
85%
MultiBank Group information and reviews
MultiBank Group
84%
Libertex information and reviews
Libertex
83%
Vantage information and reviews
Vantage
83%

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.