Gold Forecast: Policymakers, however, remain focused on bringing down inflation and were set to keep interest rates in the US higher for longer. Apart from this, a generally positive risk tone acted as a headwind for the safe-haven gold price (Yellow Metal) and capped the upside. Investors turned optimistic in the wake of the reopening of the Chinese economy. China abruptly dropped ultra-strict curbs on travel and activity despite the continuous rise in new COVID-19 cases.
- Gold price climbs to a seven-month high on Wednesday due to less hawkish FOMC minutes.
- A positive risk tone keeps a lid on the safe-haven gold, though the downside seems cushioned.
- Traders look to the US ADP report and Jobless Claims for some impetus ahead of the NFP on Friday.
Gold Spot Trading Call and Forecast: Go For long positions from corrections above the level of 1784.20 with a target of $1950.00 – $1966.
Gold price gained traction for the fourth straight day on Wednesday and touched a seven-month top amid the prospect of smaller rate hikes by the Fed. The December FOMC policy meeting minutes showed that officials unanimously supported raising borrowing costs at a slower pace and dragged US Treasury bond yields to a three-week low. This, in turn, weighed on the US Dollar and pushed the non-yielding yellow metal to the $1,865 region.
Gold Technical Report
From a technical perspective, any subsequent slide will likely find support near the previous multi-month high, around the $1,827 area. This is followed by the $1,823 horizontal resistance breakpoint, which should act as a near-term base for Gold price. Failure to defend the said support levels could prompt some technical selling and drag the gold back towards the $1,800 mark. The corrective decline could extend towards the critical 200-day SMA, currently around the $1,780 region.
On the flip side, the overnight swing high, near the $1,865 zone, could act as an immediate hurdle for Gold price ahead of the $1,877 region. Some follow-through buying will be seen as a fresh trigger for bullish traders and pave the way for a move towards reclaiming the $1,900 round figure for the first time since May 2022.