Gold holds steady on dovish Fed signals

Gold prices remain stable, consolidating gains after surging past the $2,000 level earlier this week. The jump came following dovish signals from the U.S. Federal Reserve indicating an end to interest rate hikes and potential cuts in 2024.

The Fed’s more accommodative stance sparked heavy losses in the dollar and Treasury yields and boosted gold’s safe-haven appeal. This morning, spot gold (XAU/USD) traded at $2,043.80 per ounce as of 10:25 GMT.

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On a technical level, gold has bounced from its 50-day moving average. The next key resistance point sits around $2,073.96. If prices can break above that level, there are limited barriers to testing all-time highs around $2,135.

While lower rates support gold by reducing its opportunity cost, improving risk appetite could shift capital away from haven assets like gold towards stocks and currencies. Investors may take a wait-and-see approach as markets digest the potential for easing financial conditions down the road.