Long depended on Fed expectation

OANDA:XAUUSD   Gold Spot / U.S. Dollar
Gold crossed its August 2020 high due to expectations of a US interest rate cut and the cautious stance of the Federal Reserve. The Fed's comments fueled the gold rally. Gold prices were further boosted by Federal Reserve Chairman Powell's comments on the restrictive monetary policy stance. The comment led to a decrease in yields and the US dollar, favoring the rise of gold.
Amid speculation of impending interest rate cuts, Powell cautioned against premature expectations. This led to a cautious market, with gold prices reflecting a hesitancy to react to signs of the Federal Reserve delaying rate cuts

Gold prices fell today from Monday's highs, perhaps reflecting the market's reaction to signs that the Federal Reserve is in no rush to cut rates.
This sentiment was reflected in the Treasury market as the 10-year yield rose. The upcoming US labor force data, which is expected to show rising wages and Iran's steady unemployment rate, could weigh on gold trends.

The significant activity of buying gold by central banks with the net purchase of 800 tons of gold last year has been the main factor behind the positive performance of gold. In the absence of a clear catalyst, the increase in the price of gold on the day may be due to the execution of profit limits of long positions. In this case, we can have the possibility of a short-term retreat in the price of gold.

The medium-term outlook for gold looks upbeat, however, the potential for real rates to rise in the face of deflation may weigh on gold investments, while net long positions have increased. ETF holdings have not risen significantly, reflecting mixed sentiment. It is in the gold market.

Our direction for gold remains bullish and dips can be bought. Significant levels for a buy scenario are the 2035 levels.

Any talk and possibility of an interest rate hike by the Federal Reserve can bring the price of gold back to the 1850 area, and if the expectations of an increase in interest rates by the Federal Reserve continue to increase as in the past weeks, the price of gold will be above 50-20.


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