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Gold (XAU) Daily Forecast: Support at $2325, Boosted by Fed’s Dovish Stance

By:
Arslan Ali
Published: Jul 3, 2024, 06:37 GMT+00:00

Key Points:

  • Gold (XAU/USD) rose to $2332.42, up 0.14%, during Wednesday’s Asian trading session.
  • Dovish comments from Fed Chair Jerome Powell boosted market sentiment, driving gold prices higher.
  • Gold's appeal as a safe-haven asset is strengthened by global economic and geopolitical concerns.
Gold (XAU) Daily Forecast: Support at $2325, Boosted by Fed’s Dovish Stance

In this article:

Market Overview

In Wednesday’s Asian trading session, the price of gold (XAU/USD) received a significant lift, currently trading near $2332.42, a 0.14% increase. This advance capitalizes on the previous day’s recovery from the support zone between $2319 and $2318, positioning the metal at the upper boundary of its recent trading range.

Federal Reserve’s Dovish Signals

Market sentiment was bolstered by dovish comments from Federal Reserve Chair Jerome Powell, reinforcing expectations that the U.S. central bank may start reducing interest rates as soon as September.

This prospect has invigorated gold buyers, considering gold’s appeal as a hedge against currency devaluation.

Economic and Political Uncertainties

Gold prices are also finding support from ongoing global economic concerns and geopolitical strains, alongside political uncertainties in the U.S. and Europe. These factors are contributing to gold’s allure as a safe-haven asset.

Upcoming Economic Indicators

Investors remain cautious, awaiting further insights from the upcoming release of the FOMC meeting minutes later in the U.S. session. This document is critical for gauging future U.S. dollar movements and could significantly impact gold prices. Additional cues are expected from the U.S. economic docket, which includes the ADP report on private-sector employment and the ISM Services PMI.

In conclusion, while the near-term outlook for gold prices seems constrained by a wait-and-see approach regarding Federal Reserve policies, the overall trajectory for XAU/USD appears upward. Investors might view any pullbacks as opportune moments for buying, considering the robust fundamental backdrop suggesting a bullish inclination for gold.

Short-term Forecast

Gold (XAU/USD) is expected to stay bullish above $2327.17, targeting immediate resistance at $2336.85. A break below $2327.17 could signal a sharp selling trend, potentially testing support at $2318.83.

Gold Prices Forecast: Technical Analysis

Gold - Chart
Gold – Chart

Gold (XAU/USD) is currently trading at $2332.42, up 0.14%. The 2-hour chart reveals key levels, with the pivot point at $2327.17. Immediate resistance is at $2336.85, followed by $2345.35 and $2354.14. Support levels are $2318.83, $2309.68, and $2300.67.

Technical indicators show the 50 EMA at $2327.02 and the 200 EMA at $2328.33, indicating a bullish trend. Gold remains bullish above $2327.17, but a break below this level could lead to a sharp selling trend.

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About the Author

Arslan Aliauthor

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.

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