CommodityTrading Idea

GOLD: Rebound in short term?

Gold prices slid on Tuesday, pressured by a firm U.S. dollar and Treasury yields, while investors eyed remarks from several Federal Reserve officials this week to assess the likelihood of the central bank’s interest rate cuts in the year.

Spot gold GOLD was down 0.6% at $2,041.50 per ounce as of 9:26 a.m. ET (1426 GMT), after gaining in the previous three sessions. U.S. gold futures GOLD fell 0.3% to $2,045.90.

“Strong gains in the U.S. dollar index are pressuring the gold market as well as a rise in U.S. Treasury yields today on this first day back from the three-day holiday weekend,” said Jim Wyckoff, senior analyst at Kitco Metals.

“However, one could argue that losses in gold are not bad compared to how strong the dollar is as tensions in the Middle East is keeping a floor under the prices.”

The dollar index DXY rose 0.5% to a more than one-month high, making bullion less attractive for other currency holders, while yields on the benchmark U.S. 10-year Treasury notes US10Y also gained.

Fed Governor Christopher Waller is scheduled to deliver a speech on the economic outlook before the Brookings Institution at 1600 GMT, with at least other six officials due to speak this week.

“Fed officials probably will keep a neutral guidance, keeping all options on the table based on incoming data. So to see gold prices tick higher, we need to remain on a soft landing path,” said UBS analyst Giovanni Staunovo.

The U.S. central bank is widely expected to hold its policy rate steady at the end of its Jan. 30-31 meeting. Traders see a 70% probability of an interest rate cut in March, according to the CME Fedwatch tool.

Elsewhere, European Central Bank officials pushed back against market expectations for rapid rate cuts this year.

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| Intraday Analysis | 1H Time Frame |

🔴 From a technical perspective, Gold still has the possibility of triggering a bullish swing in the short term. If we look at 1H chart, Gold could reach area around 2067 area at least with three waves if it manages to break the resistance area.

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