Gold price (XAU/USD) rises early Monday as a subdued US Dollar and upbeat Chinese economic data improved risk sentiment.
Key Factors:
- Strong Chinese Data: Positive Retail Sales and Industrial Production figures boost market optimism, reducing demand for the safe-haven US Dollar.
- Fading Fed Rate Cut Bets: Expectations for an early Fed pivot have waned, boosting US Treasury yields and increasing the opportunity cost of holding non-yielding Gold.
- Focus on Fed: Markets await Wednesday’s Fed decision and updated interest rate projections (dot plot) for key insights into the rate outlook.
Technical Outlook:
- Gold Recovers: After testing a fresh weekly low near $2,145, Gold rebounds but may face correction towards the 20-day EMA ($2,097).
- Support Levels: December 4 high ($2,145) and December 28 high ($2,088) offer potential support.
- RSI Retreat: While still indicating upside momentum, the Relative Strength Index (RSI) has retraced from its peak.