Gold is set for a second consecutive week of gains as markets hold onto hopes for Fed rate cuts in 2024.Recall that lower interest rates tend to boost demand for gold, in light of the fact that bullion pays no interest to investors who hold on to them (zero-yielding asset).Hence, lower interest rates and yields lower the “pain” (opportunity cost) that investors endure by buying bullion.Gold bulls (those hoping prices will move higher) must be delighted that prices were able to overcome recent cycle highs at $2048.09 (Dec 14th intraday high) and $2052.05 (Nov 29th intraday high).
A daily close above these levels may see spot gold go on to test resistance at the May 4th 2023 peak of $2062.97.
Beyond $2062.97, the following price regions may offer stronger resistance:
If gold prices can conquer all of the above-listed levels, then bulls would be eager to push its way back towards the current record high of $2147.14.
In the interim, gold bulls are expected to keep chasing higher prices for the precious metal going into the new year, as long as expectations for Fed rate cuts in 2024 can remain intact.
Later today (Friday, Dec 22nd), the US PCE Deflator data could trigger Gold’s next move.Economists are forecasting that the month-on-month figures will hold steady, while the year-on-year (November 2023 vs. November 2022) numbers will ease slightly to 2.8%, and 3.3% for the core print.
Further declines may invite stronger support around the psychologically-important $2k mark.