Gold Price Forecast: XAU/USD reclaims $2,000 ahead of Fed rate call
31.10.2023, 19:04

Gold Price Forecast: XAU/USD reclaims $2,000 ahead of Fed rate call

  • Spot Gold prices are on the high end as investors await the latest Fed statement.
  • XAU/USD is hesitating near the $2,000 major level, but markets remain pinned in risk-off territory.
  • Central banks may be a major underpin in Gold prices.

The XAU/USD is seeing some hesitation after pinning into the $2,000 major level as investors turn broadly risk-off ahead of the Federal Reserve's (Fed) upcoming interest rate call slated for tomorrow.

Spot Gold is set for it's best four-week performance in over seven months, with the XAU/USD reaching 11% from October's low bids near $1,810 and reaching a monthly high of $2,009.49.

Broad-market sentiment remains firmly beaten back on Tuesday, with Gold and the US Dollar climbing for the day as investors brace for the Fed rate call tomorrow. Markets anticipate the US central bank will hold rates steady for the upcoming meeting, but steady US economic data and still-firm inflation figures are increasing the chances of one last rate hike for 2023 at December's Fed meeting.

Central bank Gold purchases may have been an unexpected underpin in XAU/USD bids lately; according to reporting by the World Gold Council (WGC), central banks were a primary driver of Gold demand in the 3rd quarter.

Central banks socked away an additional 337 tons of physical Gold in the three months through September, compared to 175 tons the previous quarter, and 103 tons the quarter before that.

Central bank Gold purchases for 2023 now total over 800 tons, and central bank Gold demand is a key counterweight for XAU/USD bids that have become increasingly disconnected from US Treasury yields as of late.

XAU/USD Technical Outlook

Spot Gold's recent gains see the XAU/USD vaulting cleanly over the 200-day Simple Moving Average (SMA) currently rising into $1,940.

The 50-day SMA is set to complete a bullish rollover, rising into $1,940, and will confirm a bullish crossover of the 200-day SMA if XAU/USD sellers don't get bids pushed back towards $1,900.

2022's swing high of $2,079.76 sits as the key ceiling to break through for Gold bulls, while a bearish return to October's bottoms past $1,810 will see the XAU/USD trading into fresh lows for 2023.

XAU/USD Daily Candles

 

XAU/USD Technical Levels

 

 

 

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