Gold continues to be strong and could reach its all-time high in 2024. However, this all depends on the behavior of interest rates and the price of the US dollar. At the end of last year, the Federal Reserve ended interest rate hikes in the United States. This could lead to flexibility in monetary policy, positively impacting the relationship between gold and the dollar.
However, it is also normal for some uncertainty about interest rates, inflation, and the economy. If interest rates remain high, metals markets may be affected, with a possible precipitous fall in value, which would also cause all investors to keep an eye on the stock market and its possible reaction. Another aspect to consider is the volatility that could be produced at the year’s end due to the United States presidential elections.
Remembering that the government’s credit rating was downgraded twice in 2023 is also important. However, the Treasury Department can borrow dollars if the conditions for borrowing are made easier. This leads to an increase in the money supply as conditions in the market would be ideal for trading while at the same time the government will repay the loan to keep the economy stable.
Something to recall is that precious metals are scarce compared to the Federal Reserve’s physical money. This could lead to a shortage in supply of the gold market in 2024.
Technical analysis of the XAU/USD price
Examining the charts reveals a pronounced uptrend for XAU/USD. The strength of this trend suggests that, based on current analyses and global conditions, support lines are likely to be established between 2,000 USD and 1,985 USD. It is essential to know that the gold price may be affected by tensions in the world or if central banks increase their gold purchases, which could keep the gold price bullish for some time. Given these factors, if the upward trend persists, gold’s price relative to the dollar may find support in the coming days at levels around 2,055 USD and 2,070 USD.
