Gold (XAU) Daily Forecast: Bullish Outlook as Prices Hit $2417; Buy Now?

By:

Arslan Ali

Published: Jul 24, 2024, 06:54 GMT+00:00

Key Points:

Gold prices rise to $2417.42, driven by dovish Federal Reserve expectations.
US Dollar's decline supports gold prices amid economic weakness and political developments.
Traders await key US GDP and PCE Price Index data for further cues.

In this article:

Gold

-0.68%

Market Overview

Gold price (XAU/USD) extended its upward rally, well-bid around $2417.42, hitting an intraday high of $2418.44. This rise is driven by a softer risk tone and dovish Federal Reserve expectations. The weakening of global equity markets has increased haven demand for gold.

Additionally, the US Dollar’s drop from a nearly two-week high has further supported gold prices. Market anticipation of potential Federal Reserve rate cuts in September, along with recent US political developments, has contributed to dollar selling, supporting gold.

Traders remain cautious ahead of key data releases, including US Q2 GDP and PCE Price Index.

Gold Prices Rise Amid Weak US Economic Data and Fed Rate Cut Expectations

The US dollar’s decline from a two-week high has supported gold prices, driven by expectations of a Federal Reserve rate-cutting cycle in September and recent political developments. The Federal Reserve Bank of Richmond reported worsening manufacturing activity in July, with the composite manufacturing index dropping to -17 from -10 in June.

Additionally, the National Association of Realtors noted a 5.4% decline in US existing home sales in June, reaching an annual rate of 3.89 million units, the lowest since December.

These economic weaknesses increase the likelihood of a rate cut, boosting demand for gold as a safe-haven asset. Upcoming US GDP and PCE Price Index data are key market focuses.

Short-Term Forecast

Gold prices remain bullish above $2415, driven by weak US economic data and Fed rate cut expectations. Immediate resistance is at $2427.15, with key support at $2404.62.

Gold Prices Forecast: Technical Analysis

Gold – Chart

Gold (XAU/USD) prices have risen to $2417.42, marking a 0.29% increase. On the 2-hour chart, the pivot point is set at $2416.96. Immediate resistance levels are at $2427.15, $2437.14, and $2451.83, indicating potential upward movement if these levels are breached.

Support levels lie at $2404.62, $2384.25, and $2370.54, providing a safety net for price declines. The 50-day EMA stands at $2413.06, while the 200-day EMA is at $2375.75, both indicating a bullish trend as long as prices remain above $2415. However, a break below this pivot point could trigger a sharp selling trend.

Traders should closely monitor these key price levels and economic indicators, including US GDP and PCE Price Index data, for short-term market cues. The ongoing economic weakness and Federal Reserve rate cut expectations further support the bullish outlook for gold.

About the Author

Arslan Aliauthor

Arslan is a finance MBA and also holds an MPhil degree in behavioral finance. An expert in financial analysis and investor psychology, Arslan uses his academic background to bring valuable insights about market sentiment and whether instruments are likely to be overbought or oversold.

Did you find this article useful?