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Gold Price (XAU/USD) Analysis and Chart

  • Gold looks set for a sixth straight session of gains
  • Conflict in Ukraine and Gaza underpins the market
  • The prospect of lower interest rates, albeit not imminently, is helping too

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Gold Prices continued their run higher on Thursday, buoyed up by a little slide in the United States Dollar and the usual range of broad geopolitical risks that have tended to support the market.

With conflict ongoing in Ukraine and Gaza, the oldest haven asset looks underpinned, even as the investment world comes to terms with the likelihood that borrowing costs will remain high for longer than they had thought at the start of this year.

Wednesday’s release of minutes from the Federal Reserve’s January rate-setting meeting showed a central bank more concerned about the inflation risks of cutting rates too soon than of leaving them at current levels for a while longer. While higher rates, and higher yields, will always be headwinds for non-yielding assets such as gold, the market remains pretty sure that US rates will fall this year and that other major economies will see similar action.

For as long as that’s the case gold will find support even as assets perceived to be riskier, such as stocks, also enjoy robust gains. Goldman Sachs has reportedly this week predicted that gold will see price gains in response to Fed rate cuts, along with copper, oil, and other areas of the commodity complex.

The week may be winding down but there are a few data points still to come which might move the dial on monetary policy expectations and, hence, on gold. US Purchasing Managers Index figures are coming up Thursday, with Germany’s final read on fourth-quarter economic growth due on Friday, along with consumer confidence.

Gold Prices Technical Analysis

Gold Prices Daily Chart Compiled Using TradingView

A finish in the green today will mark a sixth straight session of gains for gold, which has on Thursday printed a new ten-day high just below $2035/ounce.

Bulls will need to get back into the $2035-$2037 resistance area from February 5-9 if they’re going to build a base from which to push higher. Prices remain in a very broad range between $1982.34 and $2078.62 which has constrained the market since late November last year.

Support below that range comes in at the third Fibonacci retracement of the climb to December 4’s highs from the lows of October 6. That comes in at $1976.84.

Notably, prices remain above their 100-day moving average, as they have since the middle of October. That point now comes in at the $2000 mark, which could be tested quite soon if the current rally peters out anywhere near current levels.

The broad range, however, seems very likely to hold given the sheer number of fundamental supports in play now.

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -13% 10% -4%
Weekly -17% 24% -3%

–By David Cottle for DailyFX


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