XAU/USD Outlook: Could Middle East Conflict Push Gold Prices Up?


 The release of the US CPI data yesterday has been seen to provide expectations for the Federal Reserve (Fed) to maintain the existing interest rate for longer while also erasing the possibility for the Fed to implement an interest rate cut in March 2024.

In addition, Fed committee member Loretta Mester has said yesterday that it is too early for the Fed to implement an interest rate cut in March 2024 following yesterday's CPI data report.

This is seen to provide a strengthening sentiment against the American Dollar.

Nevertheless, 65% of market players think that the implementation of the financial policy will take place in March 2024.

Gold was traded lower immediately after the release of the CPI report yesterday, although the ongoing Middle East Houthi geopolitical pressure in the Red Sea is seen to be able to support gold prices again.

Tonight, some data and important events will take place. "US Producer Price Index" and speech from Fed committee member Neel Kashkari is seen to be the main driver of gold price movement at the end of the second week today.

Technical Analysis

The strong "rejection" that has occurred at the level of $2,017 is seen as an early sign of "bullish" players. However, the price level of $2,040 needs to be broken to guarantee a bullish position.

If it happens gold is seen to be able to trade high up to the level of $2,065 and then $2,078.

Several important events and data will be served tonight, any pressure on the gold market can push the price of gold to $2,000. The price level of $2,017 is seen to be the main floor tonight.