Gold price resumed its rally from its October lows on Friday and surged above $1920. The previous metal has made a fresh monthly high of $1923. This recovery was massively aided by the Hamas-Israel war, coupled with lower treasury yields, which made the yellow metal more attractive to investors. At the time of writing, the safe haven asset is up 1.3% on the daily time frame.
The XAU/USD pair is up 3.4% during the week as treasury bonds entered a correction phase on Friday. On Thursday, the 0.81% surge in the DXY index was shrugged off by the precious metal as it gained $30 the very next day. This week’s bounce in the dollar strength index after the CPI report appears to be transitory.
Gold To Weaken in 2024, says HSBC
Gold price may continue to face headwinds as the rates are going to remain high for the foreseeable future. On Friday, HSBC lowered its 2024 price forecast for the precious metal to $1825 amid expectations of countries adopting a tighter monetary policy. However, the demand for jewelry, coins, and bars might help to keep the price of the yellow metal steady in the next year.
The Federal Reserve is likely to keep rates high as the CPI report published on Thursday showed inflation rose more than expected. Furthermore, the Boston Fed chairman labeled the inflation reports as “uneven progress toward restoring price stability” and advocated for further rate hikes to counter inflation.
Gold Price Forecast
On the daily timeframe, the downward trend seems to be over for gold prices as the bulls push the precious metal above the downward trendline, which is shown in the chart below. This breakout has changed the outlook from bearish to bullish. I accurately predicted a strong rebound from the $1808 level in my previous XAU/USD forecast.
The gold price forecast might flip bullish if the price reclaims the 200 MA level, which lies at the $1930 level. If the bulls keep gaining momentum, Gold might soon target its all-time high of $2075.
XAU/USD Chart
