XAUUSD : How will gold fluctuate in 2024 ?
Updated
Gold has had wild swings in 2023, rising about 15% from the beginning of the year to May, then falling 13% in October before rising nearly 19% to create a record high in early December. Currently, there are many factors that may affect and cause gold prices to continue to increase in Q1, 2024.
Weakness of the USD
Gold has an inverse relationship with US government bond yields as well as the US dollar. Therefore, when interest rates fall and the dollar weakens, precious metals often increase in price as the opportunity cost of holding gold decreases.
Although the Fed has not yet ruled out another rate hike, the market has already decided that interest rates will fall next year. This is shown by the sharp decrease in government bond yields and the USD. Therefore, even in the absence of fresh bullish momentum, the USD downtrend should still keep XAU/USD supported.
From a technical perspective, the outlook for gold's price increase is still quite complicated after gold increased sharply at the end of the year, making the current Risk-Reward ratio not too impressive.
Therefore, gold is likely to correct slightly before continuing its current bullish structure, with the first level of support located around the $2,010 area, beyond that at the $1,956 threshold.
On the upside, current resistance levels lie at $2,075 and if bullish momentum increases gold prices could return to the record high of $2,146.79.
Weakness of the USD
Gold has an inverse relationship with US government bond yields as well as the US dollar. Therefore, when interest rates fall and the dollar weakens, precious metals often increase in price as the opportunity cost of holding gold decreases.
Although the Fed has not yet ruled out another rate hike, the market has already decided that interest rates will fall next year. This is shown by the sharp decrease in government bond yields and the USD. Therefore, even in the absence of fresh bullish momentum, the USD downtrend should still keep XAU/USD supported.
From a technical perspective, the outlook for gold's price increase is still quite complicated after gold increased sharply at the end of the year, making the current Risk-Reward ratio not too impressive.
Therefore, gold is likely to correct slightly before continuing its current bullish structure, with the first level of support located around the $2,010 area, beyond that at the $1,956 threshold.
On the upside, current resistance levels lie at $2,075 and if bullish momentum increases gold prices could return to the record high of $2,146.79.
Note
XAUUSD SELL 2075-2077TP1 2071
TP2 2067
SL 2081
Trade active
running + 30 pips - Move SL to EntryTrade active
running + 45 pips - Move SL to EntryTrade active
XAUUSD SELL 2077-2079TP1 2073
TP2 2071
SL 2085
Note
running + 20 pips - Move SL to EntryNote
running + 30 pips - Move SL to EntryNote
exactly as I predicted. Gold has dropped to the 2055 zone giving us 200 pips for the long trade.
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