The Fed penciled in at least three rate cuts in 2024, lifting gold prices
The price of gold switched into recovery mode during the previous session amid a weaker dollar following the Fed’s meeting. The US currency came under renewed selling pressure as the Federal Reserve struck a more dovish tone in the accompanying policy statement on Wednesday. The central bank penciled in at least three rate cuts in 2024, assuming quarter percentage point increments. During the press conference, Powell noted that recent indicators suggest that growth in economic activity has slowed substantially from a strong pace seen in the third quarter.
After the meeting, the USD index fell back below the 103.00 figure to extend losses on Thursday. As such, the greenback slid to the 102.50 zone that has been capping the downside so far. After finding support, the dollar stays downbeat in early European deals, struggling to attract buying interest as traders remain cautious.
Against this backdrop, the XAUUSD pair rallied to settle back above the 20-DMA after finding support around three-week lows in the $1,973 area. On Thursday, the metal retains bullish bias, trading well above the $2,000 psychological level that turned back into support. As such, the technical picture has improved again, but the bullion still holds below the $2,050 zone.
Should gold regain this immediate barrier in the near term, a stronger ascent could be expected. If the pressure reemerges any time soon, the bullion could see another retreat in the days to come. On the weekly timeframes, the bullion looks mixed as, while a wider picture remains relatively upbeat. On the upside, the immediate significant target is now represented by the $2,075 region, followed by the $2,100 zone and all-time highs registered around $2,135 earlier this month. On the flip side, the nearest support is now represented by the ascending 20-DMA, today at $2,014.