{"id":75840,"date":"2024-01-16T15:19:37","date_gmt":"2024-01-16T13:19:37","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=75840"},"modified":"2025-12-17T13:27:10","modified_gmt":"2025-12-17T11:27:10","slug":"gold-outlook-seeking-a-new-direction","status":"publish","type":"post","link":"https:\/\/www.ironfx-id.com\/ar\/gold-outlook-seeking-a-new-direction\/","title":{"rendered":"Gold Outlook: Seeking a new direction"},"content":{"rendered":"

Gold\u2019s price has tended to remain in a relative sideways motion since our last gold report<\/a>. It seems as if the market remains uncertain and is currently looking for a new direction. Today we are to discuss the fundamental challenges laid ahead for the precious metal, while we will be concluding this report with a technical analysis of gold\u2019s daily chart.<\/p>\n\n\n\n

Gold\u2019s negative correlation with the USD<\/strong><\/strong><\/h2>\n\n\n\n

It should be noted that the negative correlation of the USD with gold\u2019s price seems to have been interrupted since our last report. The release of the US December CPI rates tended to highlight the persistence of inflationary pressures in the US economy. It should be noted that the headline CPI rate accelerated beyond market expectations and reached 3.4% year over year, while on a core level, it slowed down less than expected. The hotter-than-expected inflation report, in conjunction with the tighter-than-expected employment market for the same month, may allow Fed policymakers to maintain the bank\u2019s narrative of high rates for a longer period, contradicting the market\u2019s expectations for an extensive rate-cutting monetary policy in the current year.<\/p>\n\n\n\n

Yet the market seems to remain unconvinced and sticks to its dovish expectations. It was characteristic how the USD and gold wobbled for a while after the release yet returned practically to the positions they had before. Nevertheless, we expect Fed policymakers to repeat their warning that any rate cuts may be delayed, which could provide some support for the USD and weigh on gold\u2019s price. We note that there are a number of Fed policymakers scheduled to speak in the current week, and given that the market has largely priced in extensive rate cuts for the current year, we would not be surprised to see them pushing back against such expectations.<\/p>\n\n\n\n

A rise in US yields could weigh on gold\u2019s price<\/strong><\/h2>\n\n\n\n

It should be noted that US yields have tended to fall since our last report, yet since yesterday they have recovered considerable ground. It\u2019s characteristic that the 10-year, 5-year, and 3-year bond yields are at higher levels than last Tuesday, with one exception being the 2-year bond yield. Given that US bonds are an alternative for gold traders, a possible rise in US yields could weaken gold\u2019s price, as the attractiveness of US bonds may intensify, given that gold bears no interest.<\/p>\n\n\n\n

The Red Sea situation stokes uncertainty<\/strong><\/h2>\n\n\n\n

The US and UK air strikes against Houthi positions last week seem to have escalated the tensions in the Middle East. It should be noted that Houthi rebels have vowed for reprisals for US and UK attacks, and it is characteristic that they have launched missiles against US, UK, military, and merchant vessels. For the time being, there seems to be no diplomatic solution in sight, and despite the US and the UK having military superiority, Houthi rebels do not seem willing to back down. The escalating tensions tend to scare off ships from navigating through the Red Sea and are currently forcing vessels to circumvent Africa.<\/p>\n\n\n\n

Understandably, shipping costs may rise, and in such a case, the increased costs may be rolled over to consumers, which in turn may spark a new wave of inflation. For the time being, the scenario remains somewhat remote, yet it should be kept under a watchful eye, as a failure of inflationary pressures to ease further could prompt central banks to maintain rates at higher levels or cut rates at a slower pace, which in turn may weigh on gold\u2019s price in the longer run.<\/p>\n\n\n\n

Gold: Technical Analysis<\/strong><\/h2>\n\n\n\n

XAUUSD Daily Chart<\/em><\/strong><\/h3>\n\n\n\n
\"EUR\/USD<\/figure>\n\n\n\n