Gold (XAU) Daily Forecast: Prices Drop to $2,446; Rebound Ahead?

Meanwhile, geopolitical tensions in the Middle East continue to support gold prices as investors seek stability amid rising uncertainty.

Bullish Gold Outlook Driven by Fed’s Dovish Stance and Weak Job Growth

Despite mild selling pressure, the near-term outlook for gold remains bullish due to expectations of an imminent Federal Reserve rate-cutting cycle. The Fed’s dovish stance, announced on Wednesday, pushed U.S. Treasury yields to a multi-month low and weakened the U.S. Dollar (USD). Although the Fed maintained interest rates at 5.25%-5.50%, it cited progress on inflation and a cooling labor market.

Fed Chair Jerome Powell hinted at a possible rate cut in September if inflation remains steady. A disappointing ADP report showing slower labor market and wage growth reinforced the case for a rate cut, leading to a sharp drop in 10-year U.S. bond yields.

The ADP reported that U.S. private sector jobs increased by 122,000 in July, below the expected 150,000, with annual pay rising by 4.8% compared to last year. This weaker job growth pressures the Fed to consider rate cuts.

Therefore, weak job growth and the Fed’s dovish stance support a bullish outlook for gold. Lower U.S. Treasury yields and a weaker USD enhance gold’s appeal, while expectations of a Fed rate cut could drive gold prices higher in the near term.

Middle East Tensions Push Gold Prices to Two-Week High

Ongoing Middle Eastern conflicts have increased gold’s appeal as a safe haven, driving its price to a two-week high on Thursday. The recent assassination of a Hamas leader in Iran has raised concerns about a broader conflict, boosting demand for gold as investors seek stability.

The funeral for Hamas leader Ismail Haniyeh and his bodyguard was held in Tehran, with Iran’s Supreme Leader Ayatollah Ali Khamenei leading prayers. In response to rising tensions, the UN Security Council convened an emergency meeting.

Feda Abdelhady Nasser, Palestine’s deputy UN representative, called for peace and security, while Iran’s ambassador accused Israel of attempting to escalate the conflict.

In Gaza, an Israeli attack resulted in the deaths of Al Jazeera journalist Ismail al-Ghoul and camera operator Rami al-Rifi. The ongoing conflict has led to over 39,000 deaths and 91,000 injuries.

The escalating Middle East conflict and the assassination of key figures have increased gold’s appeal as a safe-haven asset, pushing prices to a two-week high as investors seek stability amid rising tensions.

Short-Term Forecast