XAUUSD has rebounded above 50-SMA

Gold prices have managed to rebound above 50-period SMA (~2019.897) as investors weighing the potential for a rate cut in the 1Q 2024.

Despite higher-than-expected US Retail Sales & Building permits readings on Wednesday, the markets are still pricing in the 53.8% chance of rate cuts in March.

However, the probability of rates to remain intact has grown up to 44.8% from 19.0% last week, following the mixed US CPI data last Thursday.

The markets now will pay very close attention to any upcoming macro-economic data on both sides of the Atlantic, along with any sudden geopolitical developments in the Middle East.

The US Core PCE reading (Fed’s preferred way to measure inflation) next Friday may be incremental in determining the fate of the interest rates.

An uptick in this reading may contribute towards Fed’s “higher for longer” mantra, thus putting an additional pressure on the zero-yielding gold.

The ECB Interest rate decision next week may also play a role in determining the XAUUSD trajectory. At the moment, the markets are expecting the EU rates to remain the same at 4.5%.

The other events worth paying attention to today are …

• ECB President Lagarde Speech
   
• Michigan Consumer Sentiment
   
• Fed Barr Speech

On the technical side ...

• The current price is trading above the 50-period SMA (2019.925), indicating a potential for a bullish trend
   
• 21-SMA with the 2046 round number are set to be the next prime targets for the XAUUSD bulls. Reaching above the 21-SMA may further reinforce the bullish sentiment and potentially propel the price towards all time high at 2134.80
   
• To the downside, if the gold bulls lose the momentum and fall back below the 50-SMA, the price may be drawn further down towards the 100-SMA sitting at 1971.281
   
• The RSI’s position at 48.66 underlines the prevailing state of uncertainty as investors await for more clues regarding the future interest rate policy and geopolitical developments