Gold (XAU) Daily Forecast: Fed’s 50bps Rate Cut Pushes Gold Toward $2,570 Resistance

Market Overview

Gold prices (XAU/USD) surged to $2,569, reversing a two-day downtrend following the U.S. Federal Reserve’s unexpected 50-basis-point rate cut. The rate cut weakened the U.S. dollar, boosting demand for gold as a safe-haven asset.

Gold’s rise was also fueled by growing concerns about economic slowdowns in the U.S. and China, alongside geopolitical tensions. Investors are now closely monitoring upcoming U.S. economic data, including Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Existing Home Sales for further direction.

Fed’s 50-Point Rate Cut Boosts Gold’s Safe-Haven Appeal

The U.S. Federal Reserve surprised markets by cutting interest rates by 50 basis points, instead of the expected 25 basis points. This larger-than-anticipated move highlights the Fed’s confidence in its progress toward the 2% inflation target, despite persistent inflationary pressures.

The rate cut led to a decline in the U.S. dollar, making gold more attractive as a non-yielding asset.

According to analysts, the Fed signalled the possibility of two to three additional 25 basis point cuts in 2024, depending on economic conditions. The central bank aims to maintain stability while navigating potential risks in the U.S. economy.

The weakened dollar has boosted gold, as lower interest rates typically increase the appeal of safe-haven assets during economic uncertainty.

Economic Concerns and Geopolitical Tensions Drive Gold Demand

Gold’s role as a safe haven is further strengthened by economic concerns and rising geopolitical tensions. Investors are increasingly worried about potential slowdowns in the U.S. and China, two of the world’s largest economies.

Additionally, ongoing geopolitical risks, particularly in the Middle East, are pushing investors toward gold.

Short-Term Forecast

Gold (XAU/USD) is holding steady at $2,569, just below the $2,571 pivot. A break above could drive bullish momentum, while a drop below $2,560 signals potential selling pressure.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,569.83, up 0.17%, showing resilience below its pivot point of $2,571.32. Immediate support is seen at $2,560.25, followed by deeper levels at $2,551.17 and $2,542.54.

Meanwhile, resistance stands at $2,598.91, with higher targets at $2,606.63. Gold’s 50-day EMA, located at $2,552.36, offers solid support, while the 200-day EMA at $2,500.50 reinforces the broader bullish trend.

Gold has retraced 50% of its Fibonacci level, near $2,550, and the formation of candles above the 50-day EMA suggests a continuation of the buying trend. A break above $2,572 may spark additional bullish momentum, but falling below could trigger more selling pressure.