Gold (XAU) Daily Forecast: Resistance at $2,508, Bearish Correction Ahead?

Market Overview

Gold prices (XAU/USD) are under pressure, hovering near $2,505 per ounce after hitting an intraday low of $2,497.65. This decline is driven by a modest recovery in the US dollar and a risk-on-market sentiment.

Despite speculation about a potential Federal Reserve rate cut in September, the strengthening US dollar has weighed on gold. Additionally, easing fears of a sharp US economic slowdown has reduced gold’s appeal as a safe haven.

Traders remain cautious ahead of the July FOMC meeting minutes and Fed Chair Powell’s upcoming speech at the Jackson Hole Symposium. Ongoing geopolitical risks and dovish Federal Reserve expectations could provide some support for gold, potentially limiting further declines.

Strong Dollar and Fed Uncertainty Keep Gold Prices Under Pressure

Gold prices remain under pressure as the US dollar strengthens despite rising expectations of a September rate cut by the Federal Reserve. Investors are holding off on making new bets, awaiting clearer signals about the Fed’s monetary policy direction.

The release of the July FOMC meeting minutes on Wednesday and Fed Chair Jerome Powell’s speech on Friday are highly anticipated for clues about possible rate cuts. Recent strong Retail Sales data has eased recession concerns, reducing market expectations for aggressive rate cuts.

However, the CME Group’s FedWatch Tool still indicates a likely start to rate cuts in September, with potential reductions totaling over 200 basis points by the end of 2025. Comments from Fed officials have been mixed, with some advocating for caution in maintaining restrictive policies and others supporting a gradual approach to rate cuts.

As a result, the strengthening US dollar and reduced expectations for aggressive Fed rate cuts continue to weigh on gold prices. Investors are waiting for clearer signals from the Fed, keeping gold under pressure amid ongoing uncertainty.

Short-Term Forecast

Gold prices are facing resistance near $2,508, with potential for a bearish correction. Watch for a break above this level to confirm a bullish trend.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is currently facing significant resistance around the $2508 level on the four-hour chart. The recent bullish momentum, triggered by the breakout of a triple top pattern near $2475, has brought the price to this key level.

However, the formation of a series of doji and bearish candles just below $2508 suggests that the bullish momentum might be waning.

Additionally, the market is showing signs of being overbought, increasing the likelihood of a slight bearish correction below $2508.

On the downside, the $2475 support level is crucial. If gold fails to hold above $2508, we could see a continuation of the bearish trend towards this support.

Bearish below $2508, but a break above this level could strengthen the bullish outlook. Keep an eye on $2475 for potential downside targets.