Gold (XAU) Daily Forecast: Can Gold Maintain Bullish Run Above $2,614?

Market Overview

Gold (XAU/USD) began the week on a strong note, reaching a high near $2,631 as investors turned to safe-haven assets. The Federal Reserve’s unexpected monetary easing and escalating geopolitical risks have contributed to gold’s upward momentum.

The weaker U.S. dollar, which dropped following the Fed’s decision to cut interest rates by 50 basis points, also supports gold’s rise. The Federal Open Market Committee’s (FOMC) rate cut surprised many analysts, who had expected a more gradual reduction.

With additional cuts likely before the year’s end, non-interest-bearing assets like gold have become increasingly attractive to investors. As Philadelphia Fed President Patrick Harker noted, the Fed is balancing “hard” and “soft” economic data to manage the economy effectively during uncertain times.

Fed Governor Michelle Bowman expressed caution, favoring a smaller rate cut due to persistent inflation concerns, while Governor Christopher Waller supported the 50 bps cut but hinted at a potential pause depending on future economic data.

Impact of Economic Growth Outlook on Gold

While rate cuts typically favor gold, the Fed’s optimistic outlook for U.S. economic growth could limit further gains. The central bank projects annual growth of around 2.0% until 2027, pointing toward a potential “soft landing” rather than a significant downturn.

This growth forecast reduces the need for safe-haven assets, suggesting that gold prices could face downward pressure if the U.S. economy continues to perform well. Investors may shift focus away from gold if confidence in economic resilience grows.

Key Data to Watch: PMI and Market Sentiment

Later today, the U.S. Purchasing Managers Index (PMI) is set to be released. A stronger-than-expected PMI reading could boost the dollar, placing downward pressure on gold.

Traders will closely monitor this data, as well as ongoing geopolitical developments in the Middle East, where rising tensions could further support gold’s safe-haven appeal.

Short-Term Forecast

Gold remains bullish above $2,614, with resistance at $2,633.77. A break above this level could see further gains, but a move below $2,614 may trigger short-term selling pressure.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,631.09, up 0.33%, as it hovers near key resistance levels. The pivot point sits at $2,614.93, and as long as prices stay above this level, the bullish trend is expected to continue.

Immediate resistance is found at $2,633.77, with further levels at $2,653.45 and $2,668.63.

On the downside, support is at $2,600.31, followed by $2,588.50. The 50-day EMA at $2,574.62 is providing solid backing for the upward trend.

A bullish engulfing candle formation signals a likely continuation of the buying trend, targeting the 161.8% Fibonacci level at $2,633.77. However, a break below $2,614.93 could trigger a sharper decline.