Technical Analysis

GOLD Price Analysis – Feb 15, 2024

By LonghornFX Technical Analysis
Feb 15, 20243 min

Daily Price Outlook 

Gold price (XAU/USD) maintained its upward trend and drew some further bids around $1,996 level. However, the upticks in gold prices were mainly driven by the sliding US bond yields and the sluggish performance of the US dollar.

Furthermore, the long-lasting geopolitical tensions in the Middle East were seen as another key factor that lent support to the safe-haven XAU/USD. In contrast to this, the mild losses in the US dollar could be short-lived as delayed Fed rate cut bets could underpin the USD and cap gains for the gold price.

Factors Influencing the US Dollar and Gold Prices

Despite the hawkish stance by the Fed and upbeat US economic data, the broad-based US dollar failed to maintain its upward trend and lost some of its positive traction, possibly due to the recent drop in US Treasury bond yields.

However, the mild losses in the US dollar could be short-lived as the previously released stronger US consumer inflation numbers have dwindled predictions of early rate cuts by the Federal Reserve, which bolstered the US Dollar, putting a lid on gold price gains. Markets now predict an 84.5% chance of unchanged rates in March, with reduced odds for a rate reduction in May.

Geopolitical Tensions in the Middle East Fuel Demand for Safe-Haven Assets

Apart from these economic factors, tensions in the Middle East are also boosting the appeal of the safe-haven precious metal. The Israeli military launched airstrikes in Lebanon following a rocket attack from Lebanon into Northern Israel, raising concerns about a potential conflict between the two nations.

At the same time, negotiations for a ceasefire between Israel and Hamas in Gaza have resumed amid international pressure to halt the bombardment of Rafah. These developments heighten geopolitical uncertainties, which push investors towards safe-haven assets like gold.

GOLD Price Chart - Source: Tradingview
GOLD Price Chart - Source: Tradingview

GOLD (XAU/USD) - Technical Analysis

In today's financial landscape, gold's slight dip to $1991.245 signals a nuanced market sentiment. With a minor 0.05% decrease in its price over the last 24 hours, the asset's stability amidst economic fluctuations underscores its role as a perennial haven for investors. The pivot point at $1982 delineates a fine line between potential gains and losses, suggesting a critical juncture for market participants.

The technical indicators reveal an intriguing narrative. The RSI at 28 points towards a possible oversold condition, hinting at an impending rebound. Simultaneously, the MACD's position, despite being negative, suggests a latent momentum shift that could alter the current price trajectory. Furthermore, the 50-day EMA at $1995, slightly above the current price, acts as a testament to the market's contemplation over gold's immediate future.

In conclusion, the technical outlook for gold on February 15th provides a cautiously optimistic picture. Despite the minor retreat in price, the underlying indicators suggest a potential for recovery, informed by the asset's historical resilience and the current market dynamics. Investors and traders alike are encouraged to monitor these developments closely, as they navigate the complexities of the gold market.

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