Gold (XAU) Daily Forecast: Trading Near $2,517, Will the Uptrend Continue?

Market Overview

Gold (XAU/USD) continued its upward momentum, trading near $2,517 and reaching an intraday high of $2,520.02. The price hit a new all-time high on Tuesday, fueled by a dovish Federal Reserve stance and US dollar weakness.

Geopolitical tensions further enhanced gold’s appeal as a safe-haven asset. However, optimism for a ceasefire in Gaza and a modest rebound in the US dollar, which recently hit its lowest level since January, limited gold’s gains.

Traders remain cautious, awaiting the release of the July FOMC meeting minutes today and Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday for potential insights into future policy directions.

Gold Hits Record High Amid Fed Rate Cut Expectations

Anticipation of a Federal Reserve rate cut in September has significantly boosted gold prices. Investors expect the Fed to reduce rates by 25 basis points, which has pressured US Treasury yields and the dollar, driving gold to a new record high on Tuesday.

The CME Group’s FedWatch Tool indicates a 70% likelihood of this rate cut. A Reuters poll also suggests a slim majority of economists now predict a 25 bps rate cut at each of the remaining three meetings in 2024.

However, Fed Governor Michelle Bowman cautioned that inflation remains above the Fed’s 2% target, which could temper expectations of immediate rate cuts.

Overall, the anticipation of rate cuts has strengthened gold’s appeal as an investment, contributing to its recent surge.

China’s Gold Import Quotas and SPDR Holdings Drive Gold Higher

China’s recent move to grant new gold import quotas to several banks signals a potential surge in demand, indicating the country might be preparing for significant gold purchases.

This development, along with a rise in SPDR Gold Trust holdings to 859 tons—the highest in seven months—reflects growing global investment demand for gold.

These factors are contributing to gold’s upward momentum, as both China’s anticipated buying spree and increasing investment demand via SPDR Gold Trust suggest stronger global demand for the precious metal.

The combination of these influences continues to support gold prices in the current market.

Short-Term Forecast

Gold prices (XAU/USD) are likely to maintain their bullish momentum as they hover around the key pivot point at $2,508.27, with potential for further gains if resistance levels are breached.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,517.21, showing a slight increase of 0.10% on the 4-hour chart. The key pivot point at $2,508.27 is crucial in determining gold’s next direction.

Immediate resistance is at $2,526.63, with further levels at $2,543.74 and $2,559.85. On the downside, immediate support is found at $2,490.10, followed by $2,470.54 and $2,451.82.

The upward channel on the chart supports a buying trend above the $2,508 level. The 50-day EMA at $2,476.15 and the 200-day EMA at $2,425.00 both signal a bullish trend.

As long as gold holds above $2,508, the buying trend is likely to continue. However, a break below this level could trigger a sharp selling trend.