Gold (XAU) Daily Forecast: Will $2,620 Support Level Spark a Buying Rebound?

Market Overview

Gold (XAU/USD) prices continue their six-day losing streak, trading around $2,621 with an intra-day low of $2,615. The recent downtrend is largely attributed to a strengthening U.S. dollar, which is hovering near a seven-week high.

As market expectations for a significant rate cut by the Federal Reserve in November wane, investors have shifted towards the dollar, applying downward pressure on gold.

Fed Rate Cut Expectations Lower, Pressuring Gold

The CME Group’s FedWatch Tool indicates an 85% probability of a 25-basis-point rate cut in November, with a potential for a 50-basis-point reduction by year-end. However, mixed signals from Federal Reserve officials have kept investors cautious.

New York Fed President John Williams hinted that a gradual lowering of rates would be appropriate, while Fed Governor Adriana Kugler emphasized that policy decisions remain data-dependent.

This uncertainty has helped sustain the U.S. dollar’s strength, adding further pressure on gold prices.

Impact of Strong Economic Data and Bond Yields

Adding to the downward pressure on gold, the 10-year U.S. Treasury yield remains above 4%, signalling investor confidence in the broader economy. Boston Fed President Susan Collins remarked that while inflation is cooling, economic and labor markets are still robust.

Fed Vice Chair Philip Jefferson noted solid economic growth, easing inflation, and a cooling labor market.

Strong economic indicators are dampening demand for safe-haven assets like gold, as traders reassess the likelihood of aggressive rate cuts.

Easing Geopolitical Tensions and Technical Selling

In addition to economic factors, easing geopolitical tensions have weighed on gold prices. Reports suggest that Iran-backed Hezbollah might be open to a ceasefire, which could reduce regional tensions and the demand for gold as a safe-haven investment.

The recent drop in gold can also be linked to technical selling after breaking below the key $2,630 support level. This breach has triggered additional selling activity, exacerbating the price decline.

In summary, a combination of a strong U.S. dollar, reduced expectations for Fed rate cuts, easing geopolitical tensions, and technical factors has driven gold prices lower, with further downside risk if current conditions persist.

Short-Term Forecast

Gold remains under pressure, hovering near $2,620. A break below this key support could trigger further declines, while resistance at $2,635 limits any upside potential.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading slightly lower at $2,621.62, down 0.01%, as the precious metal struggles to hold above the key $2,620 support level.

On the 2-hour chart, the pivot point at $2,624.22 is acting as a critical price marker. Immediate resistance stands at $2,635.46, while further resistance levels are seen at $2,644.57 and $2,652.90.

The 50-day EMA is positioned at $2,639.20, just above the current price, suggesting potential bearish pressure in the short term.

Conversely, a break above $2,635 would indicate a bullish reversal. Immediate support rests at $2,615.20, with additional supports at $2,605.62 and $2,594.94. If prices fall below $2,620, selling momentum could accelerate, pushing gold lower.