Gold Price Dips as Fed Signals Continued Tight Policy
Gold prices (XAU/USD) face pressure Wednesday as Federal Reserve (Fed) policymakers signal no interest in lowering interest rates in the near future. Higher rates make non-yielding assets like Gold less attractive by increasing their opportunity cost. Traders eagerly await Thursday's release of the US core Personal Consumption Expenditure (PCE) price index for January, a key inflation indicator that could significantly influence expectations for Fed rate cuts.
If inflation remains stubbornly high, it could dampen hopes for an early pivot and trigger a further decline in Gold prices. Tuesday's disappointing US Durable Goods Orders data, which showed a larger-than-expected decline, failed to boost Gold prices. This suggests a potentially weaker outlook for consumer spending, a factor that could weigh on Gold demand.
Technically, Gold faces challenges after failing to break above the downward-sloping resistance of a Symmetrical Triangle pattern (formed since late December). While the triangle could break in either direction, the pre-existing downtrend slightly favors a bearish outcome. A decisive break above or below the triangle's boundaries will be crucial in determining the next significant move. The 14-period Relative Strength Index (RSI) remains neutral, further signaling market indecision.
Technically, Gold faces challenges after failing to break above the downward-sloping resistance of a Symmetrical Triangle pattern (formed since late December). While the triangle could break in either direction, the pre-existing downtrend slightly favors a bearish outcome. A decisive break above or below the triangle's boundaries will be crucial in determining the next significant move. The 14-period Relative Strength Index (RSI) remains neutral, further signaling market indecision.