Fundamental analysis XAUUSD for 26.02.2024

Gold prices weakened on Monday amid the strengthening of the US dollar, but the precious metal found support near the two-week high amid the escalating problems in the Middle East. 

Gold continues to attract investors' attention despite the strengthening US dollar, with geopolitical uncertainty boosting demand for gold as a safe-haven asset. Spot gold fell to the 2030.00 level at the opening of Monday's trading session. Market attention remains focused on upcoming economic data, especially US inflation data, which should provide insight into the Federal Reserve's policy decisions. 

Concerns over rising US interest rates persisted as Fed officials reiterated their refusal to cut rates in the short term, which strengthened the dollar and worsened the outlook for gold. That said, markets are currently pricing in a 68% probability of a Fed rate cut in June, according to the CME Fed Watch Tool. 

In addition to the PCE data, the second reading of fourth quarter gross domestic product is also due out this week, which is expected to show some cooling in US economic growth. But not to a degree that would justify an interest rate cut anytime soon. While US economic growth is showing signs of slowing, expectations that interest rates will continue to rise are weighing on gold prices and alternative investments.

Technical Analysis and Scenarios:

The Alligator indicator indicates a strong uptrend with the jaw wide open and the jaw (blue line) below the lips and teeth (green and red lines). The Awesome Oscillator (AO) and Accelerator Oscillator (AC) are in the green zone, which confirms a buy signal.

Main scenario (BUY)

Recommended entry level: 2040.00

Take Profit: 2045.00

Stop Loss: 2042.50

Alternative scenario (SELL)

Recommended entry level: 2025.00

Take Profit: 2018.00

Stop loss: 2028.00