XAUUSD After the Fed's push, it's time to sell!

13 déc. 2023

I want to provide you with a detailed analysis of the situation surrounding gold, expressed from a first-person perspective. Here is a rephrased version of the information you provided: As I delve into the world of gold, I notice that it has recently shown remarkable resilience, surpassing the formidable $2,000 threshold on a Wednesday. This increase has been quite significant, especially in light of the Federal Reserve's decision to keep interest rates unchanged. However, what has truly caught my attention are the updated forecasts, indicating the possibility of three rate cuts in 2024. This projection has dealt a significant blow to the US dollar, causing it to lose ground alongside US Treasury yields. It seems that Powell, the Fed's chairman, has failed to spark enthusiasm among USD buyers. Despite this intriguing backdrop, XAU/USD, the gold-to-US dollar exchange rate, has remained relatively stable for two consecutive days. It is interesting to note that during this period, it reached both a lower low and a lower high, signaling some uncertainty in the market. Looking at the daily chart, I can see that the pair has extended its decline for the week, touching $1,973.00, which appears to be an immediate support level. In the previous September meeting, officials had hinted at a terminal rate higher than the current interest rate of 5.25%-5.50%. What adds complexity to this situation is the fact that speculative interest has long priced in the end of monetary tightening, ignoring official warnings against such premature assumptions. Furthermore, investors are now considering the possibility of multiple rate cuts in 2024, starting from the second quarter. The Summary of Economic Projections (SEP) will play a crucial role in determining the future direction of the US dollar, as it could shed light on policymakers' expectations for the years ahead. The direction of the US dollar will likely be influenced by overall market sentiment, with the possibility of the currency weakening if investors are optimistic and seek higher-yielding assets. It is a complex and uncertain landscape for gold and the US dollar, making it a fascinating market to follow. Personally, I am now waiting for gold to reach the highlighted premium area on the chart, where I will consider going short.