- Gold briefly hits $2,070 before Friday close.
- Investors betting on frequent Fed rate cuts push Gold higher.
- US inflation cools, Treasuries ease amidst risk appetite recovery.
XAU/USD tests above $2,070 before paring back towards the opening bids on Friday. As the Federal Reserve’s main interest rate sits at a 22-year high, markets await interest rate cuts, and receding US inflation is driving hopes of an accelerated pace of Fed rate cuts in 2024.
US Annualized Core Personal Consumption Expenditures (PCE) Price Index in November grew by 3.2% from last year, falling short of market forecasts of 3.3% and declining from the previous period’s 3.4%.
Read More: US PCE inflation softens to 2.6% from a year ago vs. 2.8% expected
With US inflation easing, markets are pressuring the US Dollar and bidding up Spot Gold in anticipation of rate cuts. The Fed’s dot plot shows a median forecast of 75 basis points in rate cuts through 2024, compared to current pricing of 160 basis points in cumulative rate cuts.
As markets gear up for the holiday break, the Dollar pared back losses and Gold retreated, ending the week on a notable reversal.
Spot Gold climbed over 1.10% on Friday and reversed course near the $2,070 level. Intraday action in the XAU/USD has been well-bid, outpacing the 200-hour Simple Moving Average (SMA) since breaking above $2,020.
XAU/USD has been forming a higher-lows pattern on daily candles since bottoming near $1,820 in early October, with technical support coming from the 200-day SMA near $1,960.
December’s rally has left near-term Gold bids in bull territory, with XAU/USD needing to fall below $2,000 for bearish patterns to develop.
Information on these pages contains forward-looking statements that involve risks and uncertainties and should not come across as a recommendation to buy or sell in these assets.
