Gold (XAU) Daily Forecast: Will Fed Rate Cut Push Prices to $2,600 Resistance?

Market Overview

Gold prices (XAU/USD) surged for the third consecutive day, reaching a new all-time high of $2,589 during Monday’s Asian session. The rally is driven by growing expectations of a significant interest rate cut from the Federal Reserve, as signs of easing U.S. inflation pressure the dollar.

With the dollar weakening, gold’s appeal as a non-yielding safe-haven asset has grown stronger.

Weaker Dollar and Bond Yields Bolster Gold’s Rally

The U.S. dollar remains near its lowest level of the year, largely due to speculation that the Federal Reserve could cut interest rates by as much as 50 basis points this week.

Recent inflation data, including the Consumer Price Index (CPI) and Producer Price Index (PPI), has bolstered hopes of a rate cut, driving gold prices higher. Lower bond yields are also playing a role, with the yield on the 10-year U.S.

Treasury bond hovering near its lowest point since May 2023, adding further downward pressure on the dollar.

Political and Geopolitical Uncertainty Supports Safe-Haven Appeal

Gold’s rise is also being supported by political uncertainty in the U.S., as the upcoming November election looms. Additionally, ongoing geopolitical risks, including extended conflicts in Ukraine and the Middle East, have made gold an attractive safe-haven investment.

Despite these upward pressures, the overall gains in gold are being moderated by positive sentiment in global stock markets. Investors remain cautious, awaiting key central bank decisions from the Federal Reserve, Bank of England, and Bank of Japan later this week.

With these pivotal announcements approaching, the direction for gold remains tied to central bank policy updates and broader market sentiment.

Short-Term Forecast

Gold (XAU/USD) is poised for short-term volatility, hovering below $2,589.52. A break above this level could drive prices higher, with resistance at $2,598.25 and $2,606.64.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) trades at $2,581.55, up 0.28%, but remains below its key pivot point at $2,589.52. Immediate resistance lies at $2,598.25, with further resistance levels at $2,606.64 and $2,616.22 if bullish momentum builds.

On the downside, immediate support is found at $2,571.38, followed by $2,560.25. The 50-day EMA sits at $2,531.74, reinforcing the bullish trend if prices remain above this level.

However, the outlook stays bearish below $2,589, and a break above this critical level could spark renewed upward momentum. Traders should keep an eye on the $2,589 mark to assess whether gold can continue its rally or face further consolidation.