FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
FxPro information and reviews
HFM information and reviews

XAU/USD remains on the defensive around $1,925 ahead of US PCE

27 January 2023

Gold price remains on the defensive for the second straight day amid modest US Dollar strength. Thursday’s upbeat US macro data fuels hawkish Fed expectations and underpins the greenback. A positive risk tone furtehr exerts pressure on safe-haven XAU/USD ahead of the US PCE data. The market focus will remain glued to the highly-anticipated FOMC policy meeting next week.

Gold price trades with a mild negative bias for the second successive day on Friday and hovers around the $1,925 region during the early European session. The intraday downtick, however, lacks follow-through, warranting some caution before positioning for a deeper corrective pullback from a nine-month peak touched the previous day.

Modest dollar strength weighs on gold price

The US Dollar (USD) draws support from Thursday's mostly upbeat macro data from the United States (US) and turns out to be a key factor weighing on Gold price. In fact, the US Commerce Department reported that the world's largest economy expanded at a 2.9% annualised pace during the fourth quarter against consensus estimates for a reading of 2.6%. This points to an economy that continues to show resilience despite the rapid rise in borrowing costs and backs the case for the Federal Reserve (Fed) to maintain its hawkish stance for longer. This, in turn, pushes the US Treasury bond yields higher and underpins the greenback.

Positive risk tone further undermines safe-haven XAU/USD

The robust economic indicators from the US ease recession fears and boost investors' confidence, which is evident from a generally positive tone around the equity markets. This is seen as another factor exerting some pressure on the safe-haven Gold price. The downside for the XAU/USD, meanwhile, seems cushioned as traders seem reluctant ahead of Friday's release of the Fed's preferred inflation gauge - the US Core Personal Consumption Expenditures (PCE) Price Index.

This will influence the Fed's rate-hike path, which, in turn, will drive the USD demand and provide a fresh directional impetus to the non-yielding yellow metal.

Focus remains on Federal Reserve decision next week

The focus, however, remains on the outcome of a two-day Federal Open Market Committee (FOMC) meeting, scheduled to be announced next Wednesday. The markets still seem convinced that the US central bank will soften its stance and have been pricing in a greater chance of a 25 bps rate hike on February 1. Heading into the key central bank event risk, traders might refrain from placing aggressive bets. This further makes it prudent to wait for strong follow-through selling before confirming that Gold price has topped out in the near term.

Gold price technical outlook

From a technical perspective, any further slide below the $1,920 resistance breakpoint, now turned support, is likely to attract fresh buyers around the $1,911-$1,910 support zone. This, in turn, should help limit the downside for the XAU/USD near the $1,900 round-figure mark. The latter should act as a pivotal point, which if broken decisively might shift the near-term bias in favour of bearish traders and pave the way for a meaningful corrective decline.

On the flip side, the multi-month peak, around the $1,949 area touched on Thursday, now seems to have emerged as an immediate strong barrier. Some follow-through buying has the potential to lift the Gold price to the $1,969-$1,970 region. The momentum could get extended further, which should allow the XAU/USD bulls to surpass an intermediate hurdle near the $1,980 zone and reclaim the $2,000 psychological mark for the first time since March 2022.


Share: Tweet this or Share on Facebook


EUR renewed its peak of February
EUR renewed its peak of February

EURUSD increased vividly. The current quote is 1.0910. The US Federal Reserve System did not risk giving up on lifting the interest rate, and investors got disappointed...

23 Mar 2023

Gold’s price reaches almost record highs
Gold’s price reaches almost record highs

The high volatility created by the mini-crisis in the banking sector with Credit Suisse being its latest victim tended to have a beneficial effect on gold’s price. The collapse led investors to flee en-masse towards...

22 Mar 2023

BTC is doing well
BTC is doing well

The flagship cryptocurrency rose to USD 25,858 by Friday. The weekly gain is estimated at 29.6%. The market is clearly aiming to consolidate above USD 26,200. If this succeeds, the road to 35,000-40,000 USD will be clear...

20 Mar 2023

XAU/USD depends on whether and how quickly market situation calms down
XAU/USD depends on whether and how quickly market situation calms down

The outlook for the Gold price is currently highly uncertain. he further development of the precious metal depends heavily on whether and how quickly the market turmoil subsides and the Fed...

17 Mar 2023

USD is once again of interest to all
USD is once again of interest to all

EURUSD pair looks weak on Thursday. The current quote in EURUSD is 1.0600. The fluctuation amplitude of the main currency pair looks as massive as before. It's all about the global "risk aversion" seen in the capital markets...

17 Mar 2023

Is Ripple A Good Investment And Can You Profit On XRP In 2023?
Is Ripple A Good Investment And Can You Profit On XRP In 2023?

The Ripple network is a prominent player in the crypto market, providing a blockchain-based payment protocol for fast and secure international transactions. Utilizing its own cryptocurrency, XRP

16 Mar 2023

Editors' Picks

FXCM information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
Libertex information and reviews
Vantage information and reviews
FP Markets information and reviews
FP Markets

© 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.