Gold (XAU) Daily Forecast: Climbs to $2,427; Upward Channel Drives Buying?

By:

Arslan Ali

Published: Jul 16, 2024, 06:00 GMT+00:00

Live PriceGold

$4,296.33

-1.22%

Key Points:

Gold (XAU/USD) rose to $2,427 during Tuesday's Asian session, nearing May 20's peak.
Fed rate cut expectations for September have kept U.S. Treasury yields low, benefiting Gold.
Failed Trump assassination attempt could cap Gold's rise due to increased risk appetite.

In this article:

Gold
-1.22%
Gold Forecast

Market Overview

The Gold price (XAU/USD) experienced buying interest during Tuesday’s Asian trading session, climbing to the vicinity of $2,427, which approaches the peak level last seen on May 20.

This uptick is partly fueled by expectations that the U.S. Federal Reserve will commence its rate-cutting cycle in September, an anticipation reinforced by recent remarks from Fed Chair Jerome Powell.

This prospect has kept U.S. Treasury yields low, benefiting the non-yielding gold.

Impact of Political Developments on Gold Prices

A failed assassination attempt on Donald Trump has not only potentially boosted his odds in the 2024 presidential race but also influenced market sentiment towards less stringent regulatory frameworks.

While this could enhance the allure of riskier assets, it might simultaneously restrict the upward momentum in Gold prices, traditionally viewed as a safe-haven asset.

Market Dynamics Influencing Gold Prices

Despite the strength of the U.S. dollar, which typically inversely correlates with Gold prices, Gold has shown resilience.

The U.S. dollar has seen some gains, moving away from a three-month low and potentially capping further rises in Gold prices. Additionally, ongoing rallies in global equity markets might limit Gold’s appeal as a safe investment.

Economic Indicators and Gold Price Forecast

Recent U.S. economic data, including a drop in the headline Consumer Price Index (CPI) for the first time in over four years and a deceleration in the annual rate to 3% from 3.3%, supports a less aggressive stance on inflation. This could imply an imminent reduction in interest rates, supporting Gold prices.

Looking ahead, U.S. Retail Sales data, expected to show flat growth with a slight 0.1% rise in sales excluding automobiles, will be crucial for future Gold price directions. This data may influence Federal Reserve policy decisions, which in turn could affect the trajectory of the Gold price.

Short-Term Forecast

Gold (XAU/USD) could see continued gains towards $2,440, driven by Fed rate cut expectations and low Treasury yields.

Gold Prices Forecast: Technical Analysis

Gold – Chart

Gold (XAU/USD) is currently trading at $2,427.38, up 0.21%. The 4-hour chart highlights key levels with a pivot point at $2,420.01. Immediate resistance stands at $2,439.89, followed by $2,453.28 and $2,466.01.

Support levels are identified at $2,401.70, $2,392.24, and $2,378.65. The 50-day EMA is at $2,403.38, and the 200-day EMA is at $2,367.49. The upward channel is supporting the gold price near the $2,420 level.

A bullish outlook prevails above this pivot point, with an immediate target at $2,439.89. A break below $2,420 could trigger a sharp selling trend.

About the Author

Arslan AliTechnical Analysis Expert

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.