The price of gold is taking a breather after a strong upward move last week, reaching a new yearly high. With the daily chart showing a slightly overbought Relative Strength Index (RSI), the metal faces resistance. Traders are cautious ahead of key US data and events this week.
The disappointing release of the US ISM Manufacturing PMI and less hawkish comments from Federal Reserve officials have strengthened expectations for a policy shift by the central bank. This has put pressure on the US Dollar and supported gold prices, along with a softer tone in US equity futures.
Despite this, gold’s downside is limited due to optimism surrounding Gaza ceasefire talks and potential stimulus measures from China. Traders are awaiting cues on the Fed’s rate-cut path before making significant moves. Fed Chair Jerome Powell’s testimony and US economic releases, including the Nonfarm Payrolls (NFP) report, will be closely watched for direction.
Recent market movements show the US Dollar weakening after disappointing macro data and dovish Fed remarks. The ISM Manufacturing Index fell more than expected, while consumer sentiment dropped in February. Fed officials expressed views on inflation and monetary policy, influencing market sentiment.
Technically, gold bulls remain in control after breaking through key resistance levels. However, the RSI suggests caution, and consolidation may precede further gains. Support lies at previous resistance levels, while upside targets include the $2,088 zone and $2,100 round figure.
Overall, gold’s trajectory will depend on upcoming data releases and Fed commentary, with technical factors also influencing short-term moves.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | -0.03% | -0.04% | 0.05% | 0.11% | 0.04% | 0.09% | -0.07% | |
EUR | 0.02% | -0.02% | 0.07% | 0.13% | 0.06% | 0.12% | -0.04% | |
GBP | 0.05% | 0.02% | 0.09% | 0.15% | 0.09% | 0.14% | -0.02% | |
CAD | -0.05% | -0.06% | -0.09% | 0.06% | -0.01% | 0.04% | -0.10% | |
AUD | -0.11% | -0.13% | -0.15% | -0.06% | -0.07% | -0.01% | -0.17% | |
JPY | -0.04% | -0.07% | -0.12% | -0.01% | 0.06% | 0.04% | -0.11% | |
NZD | -0.09% | -0.12% | -0.14% | -0.05% | 0.01% | -0.06% | -0.16% | |
CHF | 0.07% | 0.04% | 0.02% | 0.12% | 0.17% | 0.10% | 0.16% |
US INTEREST RATE FAQS
What are interest rates?
Financial institutions charge interest rates on loans to borrowers, while savers and depositors get interest.They are impacted by base lending rates, which central banks set in reaction to economic fluctuations. Central banks are often tasked with maintaining price stability, which usually entails aiming for a core inflation rate of roughly 2%.
If inflation falls below goal, the central bank may lower base lending rates to stimulate lending and help the economy. If inflation increases far over 2%, the central bank often raises base lending rates in an effort to reduce inflation.
How do interest rates affect currencies?
Higher interest rates often boost a country’s currency by making it more appealing to foreign investors looking to lodge their money.
How do interest rates affect the price of gold?
Higher interest rates generally have an impact on the price of gold because they raise the opportunity cost of keeping goldrather than investing in an interest-bearing asset or depositing funds in a bank. When interest rates are high, the price of the US Dollar (USD) rises, and since gold is valued in dollars, this lowers the price of gold.
What is the Federal Funds Rate?
The Federal funds rate is the overnight rate at which US banks lend to one another. It is the often mentioned headline rate established by the Federal Reserve at its FOMC meetings. It is specified as a range, such as 4.75%-5.00%, with the higher limit (5.00%) being the stated value.
The CME FedWatch tool tracks market expectations for future Fed funds rates, which influences how numerous financial markets react in anticipation of future Federal Reserve monetary policy decisions.