Gold Rises
The FED has cut the interest rates and is planning three rate cuts for 2024 amid the gold price rise. But people are more interested in Stocks than gold because of other global economic factors.
Gold prices are increasing on Monday because the US Dollar is slightly down. Geopolitical tensions and worries about a recession, especially in China and Europe, are making people turn to gold as a safe option.
During Monday’s Asian session, the Gold price (XAU/USD) went up and seems to have stopped slightly after last week’s drop near the $2,050 level. Last Wednesday, the Federal Reserve (Fed) said they’re not raising interest rates for a while and are planning at least three rate cuts of 25 basis points in 2024. This made it hard for the US Dollar to recover from its lowest level since July 31.
Despite some Fed officials saying it’s too early to talk about rate cuts, the overall positive market sentiment and good outlook from China’s Central Finance Office are supporting gold. However, the risk-on mood in the stock markets limits how much the price of gold can go up.
People are sure the Fed will cut rates in 2024, keeping the US Dollar from getting much more vital and helping Gold prices. Other factors, like a decrease in business activity in Germany, North Korea firing missiles, and China’s positive economic outlook for 2024, also make people feel good about the stock markets and less interested in gold.
For Gold price to go up, it needs to go past $2,050, facing resistance at $2,040. If it can do that, it might retest last week’s high at $2,049-2,050. On the downside, if it drops below $2,000, it could test the 50-day SMA support and go lower, shifting the focus to bearish traders. The coming days will show how all these things play out for Gold price.
