GOLD OUTLOOK & ANALYSIS

• Core PCE data keeps pressure on USD as gold soars.
• Jobless claims data in focus next week.
• Can gold bulls hold on above $2050?

XAU/USD FUNDAMENTAL FORECAST

Gold prices finally breached the $2050 level after threatening since mid-December after US PCE deflator readings missed forecasts. The core metric (Fed’s preferred inflation gauge) dropped to levels last seen in April 2021 and the first negative MoM print in over 3 years. Implied Fed funds futures below now prices in almost 160bps of cumulative rate cuts in 2024 with the first cut becoming more convincing in Q1. That being said, Durable goods orders and Michigan consumer sentiment have improved significantly and shows the resilience of the US economy in the current restrictive monetary policy environment. Jobless claims data continues to resist doves and will be closely monitored next week.

IMPLIED FED FUNDS FUTURES

Source: Refinitiv

Source: DailyFX

TECHNICAL ANALYSIS

GOLD PRICE DAILY CHART

Chart prepared by Warren Venketas, TradingView

The daily XAU/USD chart above sees bulls looking to retest the overbought zone on the Relative Strength Index (RSI). As mentioned above, with minimal volatility expected over the coming week, prices may remain around current levels.

Resistance levels:

• 2150.00
• 2081.82

Support levels:

• 2048.79
• 2000.00

GOLD IG CLIENT SENTIMENT: BULLISH

IGCS shows retail traders are currently net LONG on GOLD, with 60% of traders currently holding long positions.

https://www.dailyfx.com/news/forex-gold-weekly-forecast-xau-usd-propelled-by-softer-us-inflation-outlook-wv-20231223.html