Gold prices faced downward pressure amid prevailing risk-on sentiment in global markets, which favored riskier assets over safe-havens. Despite expectations from the World Gold Council (WGC) of strong central bank demand throughout 2024, XAU/USD continued to exhibit a bearish Head-and-Shoulders pattern on its daily chart. As of Tuesday, Gold traded around $2,310, influenced by a positive market sentiment that tempered demand for the precious metal.
The WGC's survey underscored robust expectations for central bank gold purchases in the coming year, with 81% of respondents anticipating increases in reserves, marking a significant rise compared to previous periods. This reaffirms Gold's enduring role as a long-term store of value and hedge against inflation, despite current market dynamics favoring higher-risk assets.
In addition to this, US stock indexes surged to record highs, propelled by a rally in technology stocks, further diverting investor interest away from Gold. Market expectations of a potential 0.25% cut in the Fed Funds Rate by September 2024, despite the Federal Reserve's revised interest rate outlook, also exerted downward pressure on Gold, which does not yield interest.
From a technical standpoint, indicators on the daily timeframe have signaled bearish divergence, with oscillators (MACD and RSI) showing descending trends despite Gold reaching new highs. The 50-day Exponential Moving Average (EMA) is flattening, possibly converging towards the 200-day EMA if current price trends persist. Despite these challenges, Gold finds equilibrium trading within the volume profile's defined value area. The Ichimoku cloud indicates a narrowing future outlook, reflective of recent sideways trading in the market.
In conclusion, while robust central bank demand supports Gold's long-term outlook, prevailing market conditions and investor sentiment towards riskier assets continue to dictate short-term price movements downward for XAU/USD. Investors and traders alike are closely monitoring economic indicators and central bank policies for further cues on Gold's trajectory in the near term.
| Time (GMT) | Currency | Event | Importance | Actual | Forecast | Previous |
|---|---|---|---|---|---|---|
| 07:10 | AUD | RBA Connolly Speech | Medium | |||
| 08:00 | USD | Fed Cook Speech | Medium | |||
| 11:30 | AUD | RBA Interest Rate Decision | High | 4.35% | 4.35% | 4.35% |
| 12:30 | AUD | RBA Press Conference | Medium | |||
| 16:00 | EUR | ZEW Economic Sentiment Index | High | 47.5 | 50 | 47.1 |
| 16:00 | EUR | ZEW Economic Sentiment Index | Medium | 51.3 | 47.8 | 47.0 |
| 16:00 | EUR | Inflation Rate YoY Final | High | 2.6% | 2.6% | 2.4% |
| 16:00 | EUR | Core Inflation Rate YoY Final | High | 2.9% | 2.9% | 2.7% |
| 16:00 | EUR | Inflation Rate MoM Final | High | 0.2% | 0.2% | 0.6% |
| 16:00 | EUR | CPI Final | High | 126.31 | 126.32 | 126.04 |
| 19:30 | USD | Retail Sales MoM | High | 0.2% | 0% | |
| 19:30 | USD | Retail Sales Ex Autos MoM | Medium | 0.2% | 0.2% | |
| 19:30 | USD | Retail Sales YoY | High | 2.8% | 3% |
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