- Gold experienced an early recovery at the start of trading on Monday.
- XAU/USD retreated after reaching a high near $2,020.
- Monday’s early rise marked a new five-month rally for Gold.
The prices of Gold trade higher in a new trading week, setting a new five-month high near $2,020, as the pair XAU/USD remains firm bids after a firm rebound from technical support in mid-November.
Markets are testing deeper into Gold bids as investors increase their bets that the Federal Reserve (Fed) has ended the current rate-hiking cycle, although overeager bidders continue to face frequent hits.
Even though inflation has slowed enough to cool the Fed’s rate hikes, markets remain confident that rate cuts will come sooner rather than later, and the Fed remains committed to a “hike” policy. for longer,” at least until economic data deteriorates enough to force a change in the Fed’s dot plot.
Meanwhile, Gold is seeing some strengthening in bids as money markets price in a 90% chance of the Fed leaving rates unchanged for the next two consecutive policymakers’ meetings.
With the Fed’s interest rate hike in the rearview, the point of contention for gold markets becomes a question of when the Fed’s rate cuts begin. Markets are currently seeing a 25% chance of a rate cut as soon as next March, and Gold investors will be keeping an eye on what talking points from Fed officials this week.
Fed Chairman Jerome Powell will make an appearance later in the week on Friday afternoon to participate in a talk at Spelman College in Atlanta, where the Fed Chairman will discuss “Navigating Pathways to Economic Mobility.”
XAU/USD Technical Outlook
Gold is trading at multi-month highs, looking to clear more headroom after climbing back above $2,000 once again.
Finding chart territory above $2,000 has proven to be a challenge for Gold bidders after XAU/USD fell below the key level in May, returning to year-long lows near the $1,800 area.
In October, XAU/USD again recorded a positive recovery, and Gold is up more than 11% from the October low of $1,810.
Gold saw fresh bidding after being dragged to the 200-day SMA, and buyers will be looking for a fresh round of bidding if XAU/USD sinks back towards the $1,950 level.
XAU/USD Daily Chart
XAU/USD Technical Levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
