Gold price began the new week on its front foot after dropping to a fresh year-to-date (YTD) low late last week. Even with the volatility observed in recent sessions, the bulls remain in control of the metal.
In fact, that is set to be the case for as long as the precious metal holds steady above the psychologically crucial zone of $1,800 per ounce. Nonetheless, investors seem to be waiting for a fundamental catalyst; an aspect that explains why the bulls are yet to gain enough momentum to break the resistance at $1,850.
Fundamentals
In recent sessions, fears over a hawkish Fed, coupled with the mixed US economic data, have yielded some level of uncertainty in financial markets. Recent inflation and labor data showed that while inflation has slowed, it remains significantly higher than the Fed’s target of 2%. Besides, the strong labor market points to a resilient economy; giving the central bank more room to probable approve higher interest rates for longer.
In the ensuing sessions, the focus will be on the FOMC meeting minutes set for release on Wednesday. It will be interesting to see if this is the fundamental catalyst that will reboot gold price rally. US GDP and the PCE price index on Thursday and Friday respectively will also impact the market.
Gold price forecast
On Friday, gold price hit a fresh YTD low; a level last recorded on 30th December 2022. It rebounded early in the new week but continues to trade below the crucial level of 1,850. As at the time of writing, it was up by 0.18% at 1,844.90.
A look at its daily chart shows that the precious metal is still trading below the 25 and 50-day exponential moving averages. Based on these technical indicators, coupled with the fundamentals, I forecast that it will remain subject to curbed gains for a while longer.
In particular, the range between the support level at 1,820.51 and the 50-day EMA at 1,855.96 will be worth watching in the ensuing sessions. On a broader perspective, gold price will likely continue to find steady support at the psychological zone of 1,800. Even so, I expect the probable rebounding to be curbed at 1,872.09; which is along the 25-day EMA.
