Confirming you are not from the U.S. or the Philippines

By giving this statement, I explicitly declare and confirm that:
  • I am not a U.S. citizen or resident
  • I am not a resident of the Philippines
  • I do not directly or indirectly own more than 10% of shares/voting rights/interest of the U.S. residents and/or do not control U.S. citizens or residents by other means
  • I am not under the direct or indirect ownership of more than 10% of shares/voting rights/interest and/or under the control of U.S. citizen or resident exercised by other means
  • I am not affiliated with U.S. citizens or residents in terms of Section 1504(a) of FATCA
  • I am aware of my liability for making a false declaration.
For the purposes of this statement, all U.S. dependent countries and territories are equalled to the main territory of the USA. I accept full responsibility for the accuracy of this declaration and commit to personally address and resolve any claims or issues that may arise from a breach of this statement.
Cancel Confirm
We are dedicated to your privacy and the security of your personal information. We only collect emails to provide special offers and important information about our products and services. By submitting your email address, you agree to receive such letters from us. If you want to unsubscribe or have any questions or concerns, write to our Customer Support.
Confirm
Trading news
Back
11 Jan 2023

Gold Price Forecast: XAU/USD eases from eight-month high, downside remains cushioned

  • Gold price struggles to capitalize on its intraday positive move to a fresh multi-month peak.
  • A modest US Dollar strength and a positive risk tone act as a headwind for the commodity.
  • Bets for smaller Fed rate hikes help limit losses as the focus remains on the US CPI report.

Gold price surrenders modest intraday gains to a fresh eight-month peak, around the $1,886-$1,887 area touched earlier this Wednesday and turns neutral heading into the North American session. Currently placed just above the $1,875 level, the downside for the XAU/USD remains cushioned amid expectations for a less aggressive policy tightening by the Federal Reserve (Fed).

Bets for less aggressive Federal Reserve lend support to Gold price

Friday’s mixed jobs report from the United States (US) showed a slowdown in wage growth and pointed to signs of easing inflationary pressures. Furthermore, business activity in the US services sector hit the worst level since 2009, suggesting that the effect of the Fed's large rate hikes in 2022 is being felt in the economy. This, in turn, lifted bets for smaller Fed rate hikes going forward, which keeps the US Treasury bond yields depressed near a multi-week low and might continue to lend support to the non-yielding Gold price.

Modest US Dollar strength, positive risk tone caps Gold price

That said, a modest US Dollar (USD) uptick is holding back bullish traders from placing aggressive bets. A stronger Greenback tends to act as a headwind for the US Dollar-denominated Gold price. Apart from this, a generally positive tone around the equity markets further contributes to capping the upside for the safe-haven precious metal, at least for the time being. Traders also seem reluctant and prefer to move to the sidelines ahead of the release of the latest consumer inflation figures from the United States (US), due on Thursday.

Focus remains on consumer inflation figures from United States

The crucial US CPI report will play a key role in influencing the Federal Reserve's rate-hike path and driving Gold price in the near term. Policymakers have indicated that they remain committed to combat high inflation and that rates could remain elevated for longer, or until there is clear evidence that consumer prices are falling. Hence, a stronger US CPI print will lift bets for a more hawkish Fed and push the XAU/USD back down.

Heading into the key data risk, sliding US bond yields could act as a headwind for the Greenback in the absence of any relevant market-moving economic releases from the US. This might continue to lend some support to the Gold price. Apart from this, traders might take cues from the broader risk sentiment to grab short-term opportunities around the XAU/USD.

Gold price technical outlook

From a technical perspective, any meaningful corrective slide is likely to find decent support near the $1,865-$1,860 resistance breakpoint. A sustained break below might prompt some technical selling and drag the Gold price to the $1,835-$1,833 horizontal support. On the flip side, the next level of resistance is pegged near the $1,900 round figure. A sustained strength beyond will be seen as a fresh trigger for bullish traders and pave the way for an extension of the near-term appreciating move.

Key levels to watch

 

Jan 11, 2023

USD/CAD should continue to push lower, scope for gains is limited – Scotiabank

USD/CAD consolidates but still trades shy of fair value, according to economists at Scotiabank. A drop to the upper 1.32s should play out “The CAD has
Read more Previous
Jan 11, 2023

USD/JPY refreshes weekly high amid modest USD strength, lacks bullish conviction

The USD/JPY pair gains some positive traction on Wednesday and climbs to the 133.00 neighbourhood, or a fresh weekly top during the early North Americ
Read more Next