Gold (XAU) Daily Forecast: Oversold Metal Triggers Bullish Rebound, Eyes on $2,750 Target

Market Overview

Gold (XAU/USD) faced a sharp decline overnight, falling by nearly $50 after reaching a record high close to $2,760.

This pullback was primarily driven by a surge in U.S. Treasury bond yields and a stronger U.S. dollar, prompting investors to take profits in the non-yielding asset.

Currently, gold is hovering around the $2,728 level, stabilizing as political and economic uncertainties temper further losses.

U.S. Treasury Yields and Dollar Strength Impact Gold

The U.S. dollar continues to strengthen, bolstered by rising Treasury bond yields, which hit their highest levels in three months. This dynamic led to Wednesday’s profit-taking in gold, despite ongoing political uncertainty ahead of the U.S. presidential election on November 5.

The dip in gold prices comes as traders reassess the likelihood of smaller interest rate cuts by the Federal Reserve.

According to the CME Group’s FedWatch Tool, traders estimate a 90% chance of a 25-basis-point rate cut by the Fed in November. Higher yields generally reduce the appeal of gold, as investors flock to income-generating assets like bonds.

As a result, gold is under pressure, with a strong dollar adding to the metal’s challenges.

Geopolitical and Economic Uncertainty Offer Support

Despite the headwinds, gold remains supported by geopolitical tensions and economic uncertainty. The upcoming U.S. election is raising concerns over future inflation and fiscal deficits, especially with potential tariff increases under different administrations.

Meanwhile, ongoing military action in the Middle East continues to stoke demand for safe-haven assets like gold.

With conflicting forces at play—rising yields and dollar strength on one side and geopolitical risks on the other—gold’s short-term outlook remains volatile. Investors will likely keep a close eye on both U.S. economic developments and global instability to gauge future price movements.

Short-Term Forecast

Gold prices are expected to remain volatile as the precious metal hovers near $2,735. Rising U.S. Treasury yields and dollar strength may limit gains, but geopolitical risks provide underlying support.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) has bounced back, currently trading at $2,735.37, up 0.71% on the day. The precious metal found support near $2,708 and is now pushing toward the 50% Fibonacci retracement level at $2,735, which acts as a critical pivot point. Immediate resistance stands at $2,739, with further hurdles at $2,747 and $2,752.

On the downside, key support levels are $2,727 and $2,720. The 50-day EMA at $2,730 provides short-term guidance, while the 200-day EMA at $2,702 suggests a solid floor. If gold remains above $2,733, it could extend its bullish trend. However, a break below this level may invite increased selling pressure.