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- Gold price kicks off 2024 in the green after booking the best year in three in 2023.
- The US Dollar tracks the US Treasury bond yields higher, as the mood remains mixed.
- Gold price looks to take out $2,100 as the daily technical setup remains in favor of buyers.
Gold price has started off the first trading day of 2024 on the front foot, having eked out a 14% annual gain in 2023. Gold price is finding fresh demand early Tuesday, despite an uptick in the US Dollar (USD) and the US Treasury bond yields.
Gold price looks to top-tier US jobs data for fresh impetus
Lingering Middle-East geopolitical risks keep investors on the edge starting out a new year, keeping the sentiment around the traditional safe-haven Gold underpinned.
Citing accounts by American, Maersk, and Houthi officials, Reuters reported on Tuesday that US helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea, sinking three Houthi ships and killing 10 militants.
Markets remain wary that this strife combined with the ongoing Israel-Gaza conflict could translate into a wider regional discord, scurrying for safety in havens such as Gold, the US Dollar, etc.
Meanwhile, the US Dollar is also drawing support from an extended recovery in the US Treasury bond yields, as investors’ focus now shifts toward the top-tier US economic data releases this week to revertebrate interest rate cut expectations from the US Federal Reserve (Fed) for this year. Markets are pricing in a 72% chance of a March Fed rate cut while for the May meeting stands at 84%.
Further, the latest factory data from China suggested a fragile recovery, which could potentially hinder the region’s broader revival in demand. The data failed to inspire risk sentiment, keeping the Gold price afloat. China’s manufacturing activity shrank for a third straight month in December and weakened more than expected, the official data published by China’s National Bureau of Statistics (NBS) showed Sunday. On Tuesday, China’s Caixin Manufacturing PMI showed a modest improvement to 50.8 in December.
Looking ahead, the final manufacturing PMI data from Europe and the US will fill in a relatively quiet economic calendar at the onset of 2024, with all eyes glued to the key US jobs data due to be released all through this week.
Wednesday will see the JOLTs Job Openings data while the ADP employment change and the Nonfarm Payrolls report will be published on Thursday and Friday respectively. Wednesday’s Minutes of the Fed’s December meeting will be also closely scrutinized for fresh insights on the central bank’s interest rates outlook this year.
Gold price technical analysis: Daily chart
As observed on the daily chart, the rising trendline resistance, now at $2,090, will remain a tough nut to crack for Gold price on its renewed upside.
Acceptance above the latter on a daily candlestick closing basis will challenge the $2,100 barrier. The next target for Gold buyers is envisioned at the all-time high of $2,144 should the uptrend sustain.
The 14-day Relative Strength Index (RSI) indicator has picked up its upside traction while above the midline, pointing to more gains ahead.
Adding credence to the bullish outlook, the 100-day Simple Moving Average (SMA) is on the verge of cutting the 200-day SMA from below, portraying an impending Bull Cross.
However, if Gold sellers fight back control, the initial support is seen at Friday’s low of $2,058, below which the $2,050 round figure could be probed.
The last line of defense for Gold buyers is aligned at the 21-day Simple Moving Average (SMA) at $2,037.
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