XAUUSD | Short opportunities and Geopolitical tension

1月12日

The price of gold gained bullish momentum, reaching a new weekly high above $2,050. Escalating geopolitical tensions and declining US Treasury bond yields, driven by soft producer inflation data from the United States, fueled the XAU/USD rally ahead of the weekend. Continued buying would negate any short-term negative outlook and set the stage for a move towards the round figure of $2,100. On the downside, the bearish trajectory could extend further towards the December low around the $1,973 area before eventually reaching the confluence area of $1,965-1,963, which includes the 100- and 200-day SMAs. Gold price (XAU/USD) extended its recovery on Friday from a one-month low around the $2,013 area, representing the 50-day Simple Moving Average (SMA). It gained positive traction for the second consecutive day on Friday, steadily rising during the early European session. The precious metal benefited from renewed safe-haven demand amid the risk of further escalation of geopolitical tensions in the Middle East. However, it remains below the $2,040-2,042 threshold, urging caution for bullish traders due to uncertainty regarding the Federal Reserve's rate cut path. Slightly higher consumer inflation figures released from the United States on Thursday, coupled with hawkish remarks from Fed officials, led investors to reduce their bets on a more aggressive policy easing. This provided tailwinds for US Treasury bond yields and the US Dollar (USD), potentially limiting gains for the non-yielding gold price. Markets are still pricing in a higher probability of a Fed rate cut in March, offering support for the non-yielding yellow metal as traders await the US Producer Price Index (PPI) and a speech from Minneapolis Fed President Neel Kashkari for short-term impetus.