The Price of Gold (XAU/USD) Has Descended to a Significant Support Level

FXOpen

The beginning of 2024 has not been the most positive for gold investors, despite a promising December 2023 when XAU/USD prices reached a historical high of $2135.39 per ounce, primarily due to a weak US dollar and expectations that the Federal Reserve (Fed) would begin lowering interest rates.

However, from the first trading day of January, the price of gold (XAU/USD) has fallen from around $2061 to current levels of around $2015 per ounce (a decrease of 2.3%). This is somewhat surprising considering that gold has a reputation as a defensive asset, and geopolitical tensions persist. Perhaps the price is undergoing a correction after reaching a historical high, pulling back from overbought conditions (evident from the RSI indicator).

The XAU/USD gold chart indicates that:

→ the price has descended to the psychological level of $2000 per ounce, which already showed support on January 17th;

→ the price is also near an important trendline (indicated by the thickened blue line), from which support can be expected;

→ the price is forming a consolidation pattern between the thickened red and blue lines.

What's next?

JPMorgan analysts believe that in 2024, the price of gold (XAU/USD) will reach $2300 as the US GDP growth slows down and the Fed reduces interest rates. However, they suggest that this is likely to happen in the second half of the year, and in the first half, a decline is more probable, increasing the likelihood of a bearish breakout from the current consolidation pattern.

Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce Brent Crude Oil Makes Sudden Rally As OPEC Countries Mull Low Output Market Analysis: Gold Price and Crude Oil Price Eye More Upsides Will investors focus on commodities in the advent of tomorrow's FOMC Minutes? Gold Price Recovers from Year Lows

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: CAC 40, AUD, OIL, AMAZON

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. European Stock Markets on

Commodities

Price of Gold Briefly Exceeded $2,050 per Ounce

In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold — the cost of XAU/

Indices

Nasdaq-100 Price Hits All-time High after 4 Straight Months of Gains

The Nasdaq-100 index is holding above 18,000 today following yesterday's bullish momentum, fueled by inflation news. The PCE consumer spending index amounted to 0.4% on a monthly basis, which was in line with analysts' expectations. A year ago,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.