Gold made a major breakthrough from the $2K levels to the upside during the previous week. After released PCE data, the markets are now widely expecting Fed's rate cuts during the course of this year, as inflation is evidently slowing down in the US. During the week gold was moving around $2.030 - $2.040 levels, while Friday trading session brought the final break of the $2.050 resistance line, and stop of the price at level of $2.083. With this move gold reached the highest level from the end of last year.
The RSI clearly reached the overbought market side on Friday`s trading session. This is an indication of a potential reversal point, however, it will take at least another day for the market to fully exhaust Friday's move. Moving averages of 50 and 200 days are still moving as two parallel lines without an indication of a potential cross.
Generally speaking, this year might be an important one for the price of gold. When the Fed starts cutting rates, there could be expected weakening of the USD. Considering its negative correlation with gold, there is a probability that a weak dollar will push the price of gold to higher grounds. However, it is only a possibility for the moment, while only the market will say where the price of gold should be. For the moment, the level of $2.080 will be tested at the start of the week ahead. A break of this level would mean a new ATH for the gold. At the same time there is an equal probability for a short reversal toward the $2.050 support line, which is now pending to be tested.
Important news to watch during the week ahead are:
USD: ISM Services PMI for February, Fed Chair Powell Testimony on March 6th, Non-farm payrolls for February, Unemployment Rate for February.
The RSI clearly reached the overbought market side on Friday`s trading session. This is an indication of a potential reversal point, however, it will take at least another day for the market to fully exhaust Friday's move. Moving averages of 50 and 200 days are still moving as two parallel lines without an indication of a potential cross.
Generally speaking, this year might be an important one for the price of gold. When the Fed starts cutting rates, there could be expected weakening of the USD. Considering its negative correlation with gold, there is a probability that a weak dollar will push the price of gold to higher grounds. However, it is only a possibility for the moment, while only the market will say where the price of gold should be. For the moment, the level of $2.080 will be tested at the start of the week ahead. A break of this level would mean a new ATH for the gold. At the same time there is an equal probability for a short reversal toward the $2.050 support line, which is now pending to be tested.
Important news to watch during the week ahead are:
USD: ISM Services PMI for February, Fed Chair Powell Testimony on March 6th, Non-farm payrolls for February, Unemployment Rate for February.
