XAUUSD edges towards 50-SMA despite stronger GDP reading

Gold edges higher, towards the 50-period SMA (~2026.828), despite higher-than-expected US’ economic performance last quarter of 2023.

US resilient economic data did not derail the XAUUSD bulls as the markets still price in a high (48.1%) chance for a rate cut in March.

Investors will now pay significant attention towards PCE reading (Fed’s preferred way to measure inflation) due later today.

• Higher-than-expected (>0.2%) value could contribute to the Fed’s potential decision to keep the interest rates higher-for-longer, potentially putting more pressure on zero-yielding bullion
   
• Lower-than-expected or flat (0.2 or <0.2%) reading could increase the likelihood of a March rates cuts, potentially sending XAUUSD higher

From the technical perspective …

• 50-period SMA (~2026.828) is playing a pivotal role in determining the XAUUSD movement this week
   
• Moving above the 50-period SMA could potentially create an upside momentum, sending the gold price further towards the 21-SMA ($2034.529)
   
• To the downside the major support level – psychological level is located at $2000. Breaking below it may significantly undermine the bullion bulls efforts in keeping the prices elevated for the past ~2 months
   
• RSI’s positioning around ~48.57 underlines the cautious stance of the markets ahead of the key macro-economic reading