Gold edges higher, towards the 50-period SMA (~2026.828), despite higher-than-expected US’ economic performance last quarter of 2023.

US resilient economic data did not derail the XAUUSD bulls as the markets still price in a high (48.1%) chance for a rate cut in March.

On the other side of the Atlantic, during the press conference, ECB’s president Lagarde stood by her previous comments, suggesting the likelihood of the EU interest rates cuts this summer.

This has potentially extended enough support for gold to stay in the green zone despite stronger-than-expected US’ economic activity.

Investors will now pay significant attention towards PCE reading (Fed’s preferred way to measure inflation) due later today.

• Higher-than-expected (>0.2%) value could contribute to the Fed’s potential decision to keep the interest rates higher-for-longer, potentially putting more pressure on zero-yielding bullion
• Lower-than-expected or flat (0.2 or <0.2%) reading could increase the likelihood of a March rates cuts, potentially sending XAUUSD higher
   

From the technical perspective …

• 50-period SMA (~2026.828) is playing a pivotal role in determining the XAUUSD movement this week
• Moving above the 50-period SMA could potentially create an upside momentum, sending the gold price further towards the 21-SMA ($2034.529)
• To the downside the major support level – psychological level is located at $2000. Breaking below it may significantly undermine the bullion bulls efforts in keeping the prices elevated for the past ~2 months
• RSI’s positioning around ~48.57 underlines the cautious stance of the markets ahead of the key macro-economic reading

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