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Monday, February 12, 2024

XAUUSD : Extending the decline to the $2,000 threshold

XAUUSD : Extending the decline to the $2,000 threshold


Gold fell in price in the first half of the day, rebounding slightly before Wall Street opened but continuing to decline afterward.

XAU/USD trades near a new February low at $2,011.97 despite reduced USD demand.

In the absence of much important data, the focus lies on the speeches of Federal Reserve (Fed) officials. Central bankers continued to point out that inflation still needs to move closer to the 2% target and that they need more data before cutting interest rates.

Fed Board of Governors member Michelle Bowman on Monday said that current interest rates are reasonable, adding that it is too early to consider reducing interest rates. Thomas Barkin and Neel Kashkari will speak soon, but the market does not expect any surprises in their speeches

Meanwhile, positive stock sentiment weighed on precious metals. US indexes traded in the green, with the S&P 500 surpassing 5,000 and hitting a new record high.

The market is now waiting for the US to release the January CPI report on Tuesday, at 0.2% MoM and 3% YoY. The core CPI is forecast at 3.8%, lower than 3.9% in December. Lower-than-estimated data could boost expectations for an interest rate cut in the upcoming meeting.

The daily chart of XAU/USD shows that the precious metal has many opportunities to bounce back. The pair declined from around the 20-day SMA, currently around $2,028. The long-term moving averages remain well below the current price levels. Technical indicators have now crossed below the midpoint and reflect increased selling pressure.

According to the H4 chart, the downtrend is clearer. XAU/USD is below all moving averages and technical indicators continue to decline and remain far from oversold.

Support level:


Resistance level:



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