Gold (XAU) Daily Forecast: Holds Above $2,310 Pivot, Buying Ahead?

By:

Arslan Ali

Published: May 8, 2024, 06:54 GMT+00:00

Key Points:

Spot gold nudges higher to $2,317 amidst wavering market sentiment and Fed rate cut speculation.
Mixed signals from Fed officials curb gold's gain, despite geopolitical tensions boosting safe-haven demand.
Gold holds cautious optimism above $2,310.20 pivot; eyes on Fed speeches and upcoming consumer sentiment index.

In this article:

Gold

+3.91%

Market Overview

Gold prices edged up slightly in Asian trading on Wednesday, increasing to $2,317 an ounce, though the gains were capped as market sentiment wavered. A slight recovery in June gold futures saw prices stabilize at $2,325.40 an ounce.

Despite the uptick, spot gold remains well below the late-April record highs, indicating ongoing market hesitancy.

Federal Reserve Comments Stir Rate Cut Speculation

The market’s recent fluctuations come amid conflicting signals from Federal Reserve officials, who have tempered expectations of interest rate cuts. Comments by Minneapolis Fed President Neel Kashkari suggested a more cautious approach to altering the current rate, which has led investors to reconsider the likelihood of rate reductions in 2024.

This cautious stance from the Fed has put additional pressure on gold, as higher interest rates increase the opportunity cost of holding non-yielding assets like gold.

Impact on Gold Amid Geopolitical Tensions

The ongoing conflict between Israel and Hamas has spurred some safe-haven buying, but not enough to sustain a significant rally in gold prices. The uncertain geopolitical landscape, combined with hawkish signals from the Fed, suggests a complex environment for gold investors.

Precious metals like platinum and silver also displayed mixed responses, reflecting the broader uncertainty affecting commodities markets.

Gold traders are now closely watching the speeches from other Federal Reserve officials and the consumer sentiment index, which are due later this week. These could provide further direction for the precious metal’s short-term price movements.

Gold Prices Forecast

GOLD Price Chart

In today’s trading, Gold (XAU/USD) modestly increased by 0.08% to a price of $2,317.37. The market’s pivot point stands at $2,310.20, which serves as a critical juncture for determining future price movements. Gold faces immediate resistance at $2,336.20, with further barriers at $2,351.65 and $2,369.37 that could cap gains if breached. On the downside, support is found at $2,294.59, with additional safety nets at $2,277.60 and $2,260.34, which could stave off deeper losses.

The 50-day Exponential Moving Average (EMA) is closely aligned with the current price at $2,317.42, suggesting a potential equilibrium in market sentiment, while the 200-day EMA at $2,288.72 provides stronger baseline support. The market seems cautiously optimistic, remaining bullish above the $2,310.20 pivot point. A drop below this level could lead to a sharp sell-off, highlighting the delicate state of gold trading.

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.

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