Gold is ready for a new rally towards $2055

1月22日

The price of gold struggles to capitalize on the recovery trend in place for over two days, after hitting a low of over a month, and faces renewed selling pressure at the beginning of Monday. Declining US bond yields, a weaker dollar, and geopolitical risks could limit further losses. Additional gains could occur if gold manages to stabilize above the $2,030 resistance, while a downward movement could gain momentum with a break below the psychological support of $2,000. In addition to the conflict in Gaza, tensions between Houthi rebels and the US military are rising in the key commercial shipping route of the Red Sea. Furthermore, Pakistan carried out military attacks in Iran on Thursday, following a similar attack by Iran in its territory. In this context, the precious metal has recovered significantly, but short-term prospects have not yet turned bullish as further upside seems limited by diminishing bets favoring an interest rate cut by the Federal Reserve (Fed). Price growth is gradually declining, but recent data suggests that the economy is robust, particularly due to strong household spending. This adds pressure to inflation and makes it more likely that the Fed will maintain a restrictive monetary policy stance for a longer period. The Fed is expected to keep interest rates unchanged in the range of 5.25%-5.50% for the fourth consecutive time at the monetary policy meeting on January 31. On a daily chart, we can observe that the price is in a possible reversal zone and could gather liquidity in the highlighted box at the 2020 level. From there, a bullish impulse could start, reaching the 2055 level, another area that holds significant buyside liquidity. Greetings and happy trading to everyone.