Gold Price Gains on Renewed Risk Appetite, Muted US Dollar

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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.

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