Gold Hopes to Keep Its Shine

The allure of the gold spot price (XAUUSD) is reaching new heights, lingering around levels unseen in seven months. A captivating session unfolds as the dollar experienced a notable descent, heading towards its gloomiest month in over a year. Amidst these financial developments, Wednesday’s revelation of a robust 5.2% expansion in US GDP growth, a substantial leap from the previous 2.1% and surpassing the anticipated 5%, failed to sway the prevailing sentiment that the Federal Reserve might be concluding its hiking era, leaning towards potential rate cuts in the imminent months—an outlook reinforced by Federal Reserve officials earlier in the week. 

Yet, the stage is set for a potential twist. The impending release of the PCE Price Index, slated for later today, holds the key to reshaping the current market mood. Should it unveil an unexpected surge, the market’s anticipated timeline for the first potential rate cut could undergo a substantial reassessment. This tantalizing prospect injects an element of unpredictability into the scene, with the dollar poised to potentially recapture ground lost during its recent decline. Brace for a session crackling with volatility. How will the glint of gold fare in this intricate financial environment? 


On the 4H chart, the bullish momentum is evident in the formation of the ascending channel. However, signs of potential exhaustion atop the trend leading up to the inflation data release are emerging, suggesting that the bulls may need additional fuel in the form of a dovish print to resume the current rally. 

Resistance at $2,048.86/ounce is now in focus, preventing the buyers from moving higher. A pullback toward support at $2,032.20/ounce becomes likely if this resistance continues to hold. Here, the dynamic support of the channel is at risk of a breakdown, which could see the spot price testing lower support at $2,022.67/ounce in the upcoming sessions, where the 25-SMA (green line) could hold some buyers. 

However, should resistance at $2,048.86/ounce fail to halt the current momentum, the ascending channel pattern could be sustained. Resistance at $2,059.83/ounce could be the next potential hurdle to the bulls as the spot price edges closer toward its all-time highs.  


Ahead of an eventful session, the gold spot price is trading near the psychological resistance of $2,048.86/ounce. The inflation data could be the catalyst to either aid the bulls in breaking through this resistance or the triggering event to invite sellers to potentially enforce a pullback toward $2,032.20/ounce.  

Sources: Koyfin, Tradingview 

Piece written by Tiaan van Aswegen, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.