Gold (XAU) Daily Forecast: $2,423 Amid Strong Dollar and Profit-Taking

Additionally, profit-taking after a 6.5% rally has exacerbated the drop. However, losses may be limited by cautious market sentiment and increasing geopolitical tensions, which could support gold prices.

US Dollar Strength and Rising Unemployment Claims Pressure Gold Prices

Despite expectations for a Federal Reserve rate cut in September, the US Dollar gained traction and pushed gold prices lower for the third day in a row. The latest report from the Bureau of Labor Statistics showed a rise in unemployment claims to 243,000 and the highest 4-week average in over two and a half years, indicating a weakening job market.

This, combined with decreasing inflation, suggests a potential start to the Fed’s rate cuts. Meanwhile, positive US manufacturing data and market predictions show a 100% chance of a rate cut in September, with two more expected by year-end.

The strengthening US Dollar and rising unemployment claims, alongside expectations of Federal Reserve rate cuts, have pressured gold prices lower for three consecutive days despite positive manufacturing data.

Geopolitical Tensions and Strong Dollar Impact Gold Prices

Former President Donald Trump’s comments about Taiwan paying the US for defense have cast doubt on America’s commitment to defend Taiwan against a potential Chinese attack.

This uncertainty, combined with ongoing conflicts in the Middle East and the prolonged Russia-Ukraine war, could support gold prices (XAU/USD).

However, despite these factors, gold has experienced losses this week due to a strong US dollar and profit-taking from recent rallies.

Short-Term Forecast

Gold prices (XAU/USD) are expected to remain bearish, trading near $2,423 due to a strong US dollar and profit-taking. However, geopolitical tensions may limit further declines.