Gold prices face resistance at the 50-MA mark, as traders opt to wait for the release of FOMC meeting minutes. Futures gold was at $2040.3 per ounce at the time of writing, having gained 0.01% on Tuesday’s closing. On the other hand, spot gold faired better, gaining +0.32% to trade at 2030.9. At its current price, gold is up 0.80% against the US dollar in the futures market on the weekly chart, underlining the latter’s recent weak run.
Gold has outperformed the dollar over the last one week, with the greenback under pressure from falling Treasury yields. The XAUUSD pair has benefitted from the falling yields on 10-year and 5-year Treasury bonds, as the safe haven asset offers better prospects amidst mixed macroeconomic data from the US.
China’s economy returned to business this week after a 10-day-long closure, and this could help gold advance its gains. The country’s stock markets are still trading near five-year lows, although performance has improved after the Lunar New Year holiday. Skepticism remains whether improved tourism spending during the new year could create a sustainable positive sentiment in the stock markets. Notably, the country’s equities remain the worst performing in Asia, and this could channel investment toward safe-haven gold.
The market has already priced higher-for-longer US interest rates, but the FOMC minutes will provide a broader view of the monetary policy. For the rest of the week, however, Thursday’s release of Initial Jobs Claims figures will provide a fresh impetus for the XAUUSD trajectory.
Technical Analysis
Spot gold price has been rejected at the 50-MA near the $2,033 level. The commodity has built bullish momentum as shown on the RSI indicator, and this will likely motivate the bulls past the $2,023.00 pivot. Extended control by the buyers will put XAUUSD on track to target $2038, beyond which it could test $2,044. However, a slip below $2.023 will make gold vulnerable to further slides to the $2,017 support mark, beyond which they could test $2,013.
