■ Gold edges higher for second consecutive session but dogecoin mining paidlacks momentum to breach key resistance.
■ Falling US Treasury yields and dollar weakness provide temporary support for precious metals.
■ Market participants remain cautious ahead of critical inflation data release this week.
The gold market (XAU/USD) continues its sideways movement on Friday, struggling to gather sufficient buying interest to challenge the psychologically important $2,025 threshold during Asian trading hours. Thursday's economic data from the United States presented a mixed picture - while GDP growth exceeded expectations at 3.3% annualized rate for Q4 2023, underlying inflation metrics showed signs of moderation. This combination has created uncertainty about the Federal Reserve's policy path, resulting in downward pressure on Treasury yields and temporary dollar weakness that benefits gold denominated in USD.
Ongoing geopolitical tensions in the Middle East, combined with concerns about global economic stability, continue to provide fundamental support for gold's status as a traditional safe-haven asset. However, market participants appear reluctant to make significant bullish bets ahead of the crucial Personal Consumption Expenditures (PCE) Price Index release. The inflation data could significantly influence expectations regarding the timing and extent of potential Fed rate cuts in 2024, which remains the primary driver for both the US dollar and non-yielding assets like gold in the current market environment.
Technical analysts note that gold's price action remains constrained within a defined range, with immediate resistance seen between $2,040-$2,042. A decisive breakout above this zone could potentially trigger short-covering momentum that might push prices toward $2,077, while failure to hold current support levels around $2,011 could open the door for a test of the $2,000 psychological barrier. The metal's performance this week suggests it may record its second consecutive weekly decline, continuing the pattern of mixed performance seen in recent weeks.
Market Drivers: Treasury Yield Movements and Inflation Expectations Dominate Gold Trading
The benchmark 10-year US Treasury note yield has retreated from recent highs, providing some breathing room for gold prices after last week's pressure. Market participants continue to digest Thursday's economic releases, which showed stronger-than-expected GDP growth accompanied by moderating inflation pressures in the core PCE Price Index data. This combination has created uncertainty about the Federal Reserve's policy trajectory, with traders scaling back expectations for aggressive rate cuts in early 2024.
Additional economic indicators released Thursday showed mixed signals - while Weekly Initial Jobless Claims rose slightly to 214,000, the Durable Goods Orders report indicated stability in manufacturing demand. These factors, combined with ongoing geopolitical risks and global growth concerns, create a complex environment for gold traders attempting to gauge the metal's near-term direction.
All eyes now turn to the upcoming PCE Price Index data, which serves as the Federal Reserve's preferred inflation gauge. The release could provide critical information about whether recent disinflationary trends are continuing, potentially influencing the central bank's policy decisions at next week's highly anticipated FOMC meeting. Market participants will be closely analyzing the data for clues about the timing and magnitude of potential rate adjustments in 2024, which will likely determine gold's near-term price trajectory.
Technical Perspective: Gold's Rangebound Trading Pattern Signals Caution
From a technical standpoint, gold's inability to sustain momentum above $2,025 suggests continued resistance from market participants. The $2,040-$2,042 zone represents a critical supply area that bulls must overcome to regain control of the near-term trend. A successful breakout above this barrier could potentially open the path toward $2,077, with $2,100 representing the next significant psychological resistance level.
Conversely, failure to hold current support around $2,011 could lead to a test of the $2,000 handle, which represents both psychological and technical support. A decisive break below this level might trigger additional selling pressure, potentially pushing prices toward the 100-day Simple Moving Average near $1,975-$1,976. In a more bearish scenario, the 200-day SMA around $1,964 could come into play as the next major support zone for the precious metal.
