Article by: ETO Markets
The USD selling tendency is still there, but the safe-haven gold price is capped at the $2,040 supply zone due to the general risk-on sentiment. In anticipation of the most recent monetary policy announcements from the European Central Bank, the Bank of England, and the Swiss National Bank later today, traders choose to remain on the sidelines. Aside from this, the monthly US Retail Sales data release could provide the metal some momentum. However, the underlying environment is conducive to the possibility of an additional upward advance.
Following a two-day meeting, the Fed is expected to make its policy announcement later in the US session. Nonetheless, attention will continue to be focused on the revised economic forecasts and Fed Chair Jerome Powell's news conference following the meeting. Ahead of the major Bank of Japan monetary policy meeting next week, investors will be watching for clues regarding the Fed's future rate path. This will have a significant impact on the USD price dynamics and provide the USD/JPY pair some much-needed momentum.
The precious metal gains pace and reaches a one-week high, but it stalls close to the $2,040 supply zone. One important element that is acting as a headwind for the safe-haven gold is the general risk-on climate. Nevertheless, geopolitical risk, worries about a slowdown in China's economy, and the Federal Reserve's dovish trend favour bullish traders and promote the likelihood of a further increase in the commodity's value.
Some follow-through buying above $… will be viewed by optimistic traders as a new trigger. The price of gold may then move up to the next significant barrier, which is probably around $... If the momentum continues, the XAU/USD pair may be able to recover the $… round-figure mark.
Conversely, the horizontal line $… may now shield the short-term decline ahead of the psychological $… barrier. The price of gold will become susceptible and reveal the 50-DMA support, which is now located around the $…, if there is a strong break below the latter.
The EIA has removed 4.259 million barrels from its crude oil inventory, which is more than the 0.65 million barrels that were anticipated. Following the Federal Reserve meeting, the price of WTI increased, and market forecasts are now pointing to three rate cuts for 2024. The dovish tone of Fed Chair Jerome Powell has contributed to the belief that lower interest rates can slash borrowing costs, which could increase economic growth and, in turn, demand for oil.
At $…, US Crude Oil is trading on the south side of the 200-HMA, indicating that it is still well within the cut. Since intraday bids moved away from the moving average at the start of December when barrel prices fell from $…, WTI has not approached the 200-HMA.
As oil bulls fight to maintain crude oil above six-month lows near the $… handle, daily candlesticks show that WTI is trading firmly into bear zone, trading below the 200-DMA near the … mark. As the 20-DMA positions itself for a bearish crossover of the 200-DMA, oil bidders will have their work cut out for them.
