Here’s the update on XAUUSD today, December 19, 2023. Gold prices (XAU/USD) remain stagnant in a narrow range during the Asian session on Tuesday after a moderate rise earlier. Influential Federal Reserve officials are attempting to dampen market expectations for early interest rate cuts in 2024, which poses a hurdle for gold.
 
Although the U.S. central bank took a dovish stance last week with projections for three rate cuts in 2024, the U.S. dollar remains defensive, supporting gold prices. A bullish sentiment in global equity markets is also limiting gains for the precious metal.
 
Geopolitical tensions in the Middle East may help limit the decline of XAU/USD, and traders may be waiting for U.S. inflation data on Friday before making decisions.
 
Market Movers Summary: Gold prices are struggling to gain attention amid mixed economic signals.
 
Chicago Fed President Austan Goolsbee and Cleveland Fed President Loretta Mester dismissed speculation about interest rate cuts on Monday. Goolsbee expressed confusion over the market's reaction to last week’s FOMC meeting, emphasizing that the central bank is not committed to lowering rates anytime soon. Mester noted that financial markets are already pricing in rate cuts for next year ahead of the central bank.
 
New York Fed President John Williams stated on Friday that it is too early to speculate about rate cuts, which is limiting gold prices. Although markets are confident that the Fed will ease policy in the first half of 2024, the U.S. dollar continues to weaken, supporting the precious metal.
 
Concerns over geopolitical risks in the Middle East, particularly the conflict in Yemen, are also contributing to limiting declines in gold, which is seen as a safe-haven asset. Houthi militants in Yemen responded to Israeli strikes in Gaza with a series of drone and missile attacks in the southern Red Sea. U.S. Secretary of Defense Lloyd Austin has formed a multinational coalition and launched Operation Prosperity Guardian to address Houthi threats in the Red Sea.
 
Investors are awaiting the Core Personal Consumption Expenditures (PCE) Price Index data on Friday as a clue to future Fed policy.
 
Technical Analysis: Gold prices may see an increase after breaking above the $2,040 supply zone.
 
From a technical perspective, for buyers to take control in the short term, gold prices need to hold above the $2,040 supply zone. A breakout above last week’s swing high, around $2,049-2,050, could open the door for further movement toward relevant areas around $2,072-2,073. If the upward momentum continues, XAU/USD could reach the round figure of $2,100 again.
 
On the downside, the $2,015 area is expected to remain a support level, with horizontal resistance at $2,010 and the psychological level of $2,000. A strong breakout below these levels could lead gold prices to test the 50-day Simple Moving Average (SMA), around $1,985, before reaching last week’s low around $1,973. Sellers may then test the 200-day SMA, near the $1,956 zone.
 
Warning!
 
This is the explanation regarding "XAUUSD Today: December 19, 2023 - Fed Signals Cause Price Fluctuations!" This analysis is based on views from reliable fundamental and technical sources and does not constitute advice or a solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information to guide your trading decisions.
 
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