XAUUSD sees slight pullback after post-Fed surge

Gold has experienced a strong upward momentum, but has eased slightly to now trade around $2030, following the Fed’s policy meeting which signaled a likely end to this interest rate hike cycle.

The markets are already expecting the interest rate cuts to begin as early as March 2024.

With the 10-year US treasury yields now approaching a 3-month low, XAUUSD is gaining appeal among the investors as the opportunity cost for holding a zero-yielding Gold is decreasing.

During the past four days the world’s largest gold ETF has experienced a 3% rise in net asset value (from 56.1M to 57.7M).

Additional support to the yellow metal was also extended by the world’s central banks which have collectively managed to purchase ~1000 tons of physical gold this year.

On the technical side…

• The long-term 100 & 200-period SMAs are both positioned below the current price (~$2030), indicating a potential bullish trend
   
• The $2047.87 resistance may soon turn to be a strong support if gold bulls manage to retain the upward momentum
   
• The 21-period SMA followed by the $2000 psychological level may extend support if XAUUSD bears would try to regain the control
   
• Current RSI positioning at 57.42 (<30 – oversold; >70 – overbought) underscores a further upside potential