XAUUSD : Will the upward trend continue?
Updated
Although interest rates are still remaining high, gold prices are remaining stable and history has proven that gold prices will respond positively to lower interest rates and quantitative easing. Besides, geopolitical risks and unexpected crises can also be the reason to push gold prices higher.
Despite record high interest rates, gold shows notable upside potential. We all know that precious metals often move in the opposite direction of interest rates. In other words, the correlation between interest rates and gold is always opposite.
Real interest rates are fluctuating close to 2008 levels. However, even though real interest rates are quite high, gold prices are also recording an increase. There was a time when interest rates were similarly high, and gold prices were just near the $1,000/ounce mark. So with interest rates like this, gold should be trading around 1000 USD/ounce. But gold prices have been trading steadily above $2,000 for a while. In fact, they are not falling despite multiple rate hikes in 2022 and 2023.
In addition to interest rate cuts and the possibility of an economic recession, there are also geopolitical risks that could cause gold to surge in price. Here are just some of them:
Tensions escalate between Taiwan between the US and China. Remember that the stock market reacted quite negatively to the trade war between China and the US in 2019 and it is possible that a similar situation will repeat.
Conflict is growing between NATO and Russia. This can lead to political, military and economic problems as well.
Tensions increase in the Middle East. A lot has been written about the Houthis in the Red Sea. But the situation could become more serious. For example, Iran could become more directly involved and cause oil supply disruptions and general geopolitical instability.
Of course, there are still many other risks. These factors could push gold prices even higher.
Despite record high interest rates, gold shows notable upside potential. We all know that precious metals often move in the opposite direction of interest rates. In other words, the correlation between interest rates and gold is always opposite.
Real interest rates are fluctuating close to 2008 levels. However, even though real interest rates are quite high, gold prices are also recording an increase. There was a time when interest rates were similarly high, and gold prices were just near the $1,000/ounce mark. So with interest rates like this, gold should be trading around 1000 USD/ounce. But gold prices have been trading steadily above $2,000 for a while. In fact, they are not falling despite multiple rate hikes in 2022 and 2023.
In addition to interest rate cuts and the possibility of an economic recession, there are also geopolitical risks that could cause gold to surge in price. Here are just some of them:
Tensions escalate between Taiwan between the US and China. Remember that the stock market reacted quite negatively to the trade war between China and the US in 2019 and it is possible that a similar situation will repeat.
Conflict is growing between NATO and Russia. This can lead to political, military and economic problems as well.
Tensions increase in the Middle East. A lot has been written about the Houthis in the Red Sea. But the situation could become more serious. For example, Iran could become more directly involved and cause oil supply disruptions and general geopolitical instability.
Of course, there are still many other risks. These factors could push gold prices even higher.
Trade active
🔝 XAUUSD : Trading plan March, 11, 2024🪙 We have 2 levels to have a good entry for the BUY signal :
💲 Entry 1 Buy Scalping : 2173 - 2175
💵TP1 : 2180
💵TP2 : 2185
🔴 SL : 2165
💲Entry 2 Buy Limit : 2167 - 2169
💵TP1 : 2175
💵TP2 : 2180
🔴 SL : 2160
🪙 We have 2 levels to have a good entry for the SELL signal :
💲Entry 1 Sell (Scalping) : 2185 - 2187
💵TP1 : 2180
💵TP2 : 2175
🔴 SL : 2195
💲Entry 2 Sell Limit : 2191 - 2193
💵TP1 : 2185
💵TP2 : 2180
🔴 SL : 2200
⚡️⚡️⚡️Note: For transactions, please leave full TP and SL to ensure safety and bring profit from the market. ‼️
🔔 Admin : @Eva_trade811
Note
Hit entry 1 BuyNote
Ahead of the US CPI report, what awaits Gold and USD?Tuesday is an important day for investors as the US Bureau of Labor Statistics will release February CPI data.
Focusing on market reaction, the relevant metric is not expected to create much volatility or change sentiment significantly, but a large spread could cause sharp price movements across many assets. product.
A hotter-than-expected CPI report would be a sign that inflation may be accelerating again and becoming difficult to control. This may force the Fed to increase its PCE forecast and possibly reduce the number of expected interest rate cuts this year at its March meeting.
This situation may cause the market to reprice interest rate expectations, pushing up US government bond yields and the USD. Thereby, gold and stock prices may experience strong selling pressure.
On the contrary, weaker-than-expected CPI figures will indicate progress in controlling inflation. This could bring greater confidence that inflation gradually falls to the 2.0% target, confirming the market's outlook for interest rate cuts in 2024.
In such a situation, US government bond yields and USD may continue to decrease in the following days and weeks, thereby pushing up gold prices.
Trade active
running 20 pips Entry 1 BuyNote
running 30 pips Entry 1 BuyNote
running 40 pips Entry 1 BuyNote
running 50 pips Entry 1 BuyTrade closed manually
⚡️Entry 2 Buy hit full TP 130 pips🔼🔼🔼⏫⏫⏫
👉 Free Signals Everyday: t.me/SantaTradeProInsightsFX
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👉 Join the group to profit every day.
👉 @bellatrader_2509
👉 Support 24/7 and More
👉 Join the group to profit every day.
👉 @bellatrader_2509
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