Gold price (XAU/USD) faces an intense sell-off after printing a fresh weekly high above $2,030 in Thursday’s early New York session. The precious metal struggles to hold a five-day winning streak as the Federal Open Market Committee (FOMC) Minutes of the late January policy meeting indicated that most Federal Reserve (Fed) policymakers are in no hurry to unwind the restrictive monetary policy stance. Fed policymakers are expected to keep interest rates unchanged in the range of 5.25%-5.50% until they get convinced that price stability can be achieved.
Easing price pressures for some months could build confidence among Fed policymakers that inflation will sustainably decline to the 2% target. Apart from that, lower weekly jobless claims have also improved the appeal for the US Dollar. The US Department of Labor reported that individuals claiming jobless benefits for the week ending February 16 for the first time were at 201K, lower than expectations of 218K and the prior reading of 213K. This reflects further improvement in labor market conditions. On the geopolitical front, Middle East tensions have escalated as Israel intensifies its attacks in Rafah, which is a Palestinian city at the southern end of Gaza. Last week, Israeli Defense Minister Yoav Gallant identified Rafah as a shelter for over 1.4 million Palestinian refugees. This has significantly improved the appeal for safe-haven assets.
Gold price struggles to hold its winning spell to the sixth day as geopolitical uncertainty deepens. The precious metal has printed a fresh 10-day high near $2,035. The yellow metal is expeditiously approaching the downward-sloping border of the Symmetrical Triangle chart pattern formed on a daily time frame, which is plotted from the December 28 high at $2,088. The upward-sloping border of the aforementioned chart pattern is placed from the December 13 low at $1,973. The triangle could break out in either direction. However, the odds marginally favor a move in the direction of the trend before the formation of the triangle – in this case up. A decisive break above or below the triangle boundary lines would indicate a breakout is underway. The 14-period Relative Strength Index (RSI) marches toward 60.00. If the RSI manages to climb above the same, a bullish momentum will be activated.