Fundamental analysis XAUUSD for 21.02.2024

The analysis of the XAU/USD currency pair shows that the subtle interplay between economic indicators, geopolitical concerns and market sentiment plays a key role in influencing the price movement. 

The price is experiencing a slight rise as traders are cautiously awaiting the Federal Open Market Committee minutes to better predict the Federal Reserve's interest rate cut prospects. Despite the doubts, gold prices rose in Asian trading, helped by the weakening dollar ahead of the publication of data on interest rates in the United States. However, the continued holding of the US interest rate at a high level and expectations of a strong US economy kept precious metals prices in check, thereby supporting rising US Treasury bond yields and a stronger dollar. The inflation rate in the US also turned out to be better than expected. This development has a negative impact on gold, as a high interest rate increases the opportunity cost of owning an asset that does not generate income. However, some analysts are predicting lower interest rates in 2024, indicating a potential rise in gold prices. 

Political forces, such as the ongoing conflict in the Middle East and the protracted conflict between Russia and Ukraine, continue to support gold as a safe-haven asset. Rising tensions, as well as fears of military expansion or Russian expansion, increase risk sentiment that favors gold. 

In short, the performance of the XAU/USD currency pair remains dependent on a combination of factors, including the U.S. Federal Reserve's interest rate decision, geopolitical uncertainty, and the overall economic outlook. Traders and investors are advised to pay close attention to these events as they could provide excellent opportunities to trigger high prices in the short to medium term.

Technical Analysis and Scenarios:

The Alligator indicator indicates an uptrend because of its hungry state with the jaw (blue line) below the lips and teeth (green and red lines). However, this bullish signal is refuted by other indicators. The Awesome Oscillator (AO) and Accelerator Oscillator (AC) are in the red zone, indicating a confirming sell signal. This suggests that despite the uptrend signal from the Alligator, momentum is shifting towards a bearish trend. Given the current indicators and price level, a bearish scenario seems more likely as AO and AC indicate a potential decline. Traders should watch for any signs of a bullish reversal, especially if price breaks above resistance levels or if there are significant changes in market sentiment or economic indicators that could push gold prices higher.

Main scenario (BUY)

Recommended entry level: 2042.00

Take Profit: 2055.00

Stop Loss: 2035.00

Alternative scenario (SELL)

Recommended entry level: 2012.00

Take Profit: 2000.00

Stop loss: 2017.00