29.01.202411:32 Forex Analysis & Reviews: Gold Price Forecast and Analysis Ahead of the Fed Meeting

Gold prices fluctuated within a narrow $10 range between $2,016 and $2,025 last week, and even in the face of the most important news of the week, the reaction was insignificant. According to the latest weekly gold survey, institutional experts and retail traders have maintained their cautious position.

Adrian Day, President of Adrian Day Asset Management, believes that the moderate inflation figures published last week will increase the prices of the precious metal this week. He suggests that the likelihood of a rate hike by the Federal Reserve in March has increased due to the low core PCE indicator.

Darin Newsom, Senior Market Analyst at Barchart.com, suggests that the yellow metal is caught in conflicting technical trends. Despite setting a new weekly low on Thursday, the price rose and closed higher on the same day. This indicates that the gold market may still attempt to enter a short-term upward trend, although it will have to contend with the medium-term downward trend on the weekly chart. The opposite situation is observed with the U.S. dollar index.

Colin Cieszynski, chief market strategist at SIA Wealth Management, has a bearish outlook for the current week. He believes that the Federal Reserve may act less dovish than traders and analysts hoped, potentially triggering a rally in the U.S. dollar and creating obstacles for gold's growth.

Frank Cholly, Senior Market Strategist at RJO Futures, suggests that investors should prepare for an extended period of sideways price movement, as the market is simply hovering above $2,000. He thinks that as long as gold stays above $2,000, one can view the price movement with some optimism. However, if the precious metal drops to $1,950, this level will become a new support. Regarding the Fed's interest rate decision meeting, Cholly believes a rate cut may not happen before June.

Jameel Ahmad, Chief Analyst at GTC Global Trade Capital, expects prices to fall below $2,000. The reason for this is the sharp change in expectations for interest rate cuts in the U.S. and the likelihood of further strengthening of the dollar, considering its recent rise. The ongoing demand for the dollar will pose an even greater threat to gold's decline.

14 Wall Street analysts participated in the survey. They continued to show caution regarding the short-term price potential of the yellow metal. Five experts, or 36%, anticipate price growth this week. Three analysts, representing 21%, predict a decline, while six analysts, representing 43%, expect prices to remain within a sideways range.

In the online poll with 89 votes, retail investors demonstrated optimism but remained indecisive overall. 43 retail investors, accounting for 48%, are expecting price growth. Another 26, or 29%, anticipate a decline, while 20 respondents, or 23%, remained neutral.

Despite the ongoing conflict in the Middle East attracting attention, the employment report in the U.S., the Federal Reserve's decision on interest rates, and Federal Reserve Chair Jerome Powell's press conference will be the main events for the markets this week.

Presumably, on Wednesday, the Federal Reserve will leave interest rates unchanged in its statement. In addition to the U.S. non-farm employment report for December on Friday, attention should be paid to U.S. consumer confidence data and JOLTS job openings on Tuesday. Also, on Wednesday, ADP employment data and the Bank of England's monetary policy statement, along with weekly jobless claims and the ISM index, should be monitored. Manufacturing data for December will be released on Thursday.