Daily Forex Review: Gold Price Forecast: XAU/USD on track to hit a new all-time high of $2,532 amid dovish Fed and geopolitical risks
Gold prices maintained recent gains to break above $2,500 in early trading on Monday as tensions in the Middle East escalated.
The dollar fell along with U.S. Treasury yields, influenced by the Federal Reserve’s dovish outlook.
Gold prices are expected to retest all-time highs as the daily technical setup favors buyers.
Gold prices consolidated the previous week’s gains at the start of the week on Monday, breaking above $2,500. Gold buyers took a breather after a second straight week of gains and moved back up to an all-time high of $2,532.
Gold prices look forward to further gains on US data
The underlying upward tone in gold prices was largely attributed to continued weakness in the U.S. dollar and negative U.S. Treasury yields following dovish comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium on Friday.
Powell explicitly confirmed that the Fed’s easing cycle will begin in September, noting that “now is the time for a policy adjustment. The way forward is clear, and the timing and pace of rate cuts will depend on incoming data, the changing outlook, and the balance of risks.”
“Upside risks to inflation have diminished. Downside risks to employment have increased. As we emphasized in our last FOMC statement, we are focused on risks on both sides of our dual mandate,” Powell added.
Amid these favorable fundamentals, gold prices still face upside risks, with the technical setup on the daily chart also favoring buyers. The next leg higher in gold prices is likely to be driven by the release of U.S. durable goods orders data during the U.S. trading session later on Monday. Gold price technical analysis: daily chart
The short-term technical outlook for gold prices continues to show upside risks while buyers hold firm above the triangle resistance-turned-support level at $2,470.
Gold prices have held onto an upside breakout of a symmetrical triangle that was confirmed a few weeks ago. The 14-day relative strength index (RSI) is above 50 and is currently approaching 63, suggesting further gains ahead.
Gold buyers need to recapture the all-time high of $2,532 to break through the next key hurdle at $2,550.
A breakout above the latter could challenge the $2,600 round number mark, leading to the triangle target of $2,660.
Conversely, if the gold price fails to sustain higher levels, a correction could unfold towards the $2,500 threshold, below which it could challenge Friday’s low of $2,485.
A sustained breakout of the latter could expose downside risk to the aforementioned triangle resistance (turned support) at $2,470.
Daily Forex Review: Gold Price Forecast: XAU/USD on track to hit a new all-time high of $2,532 amid dovish Fed and geopolitical risks
Gold prices consolidated the previous week’s gains at the start of the week on Monday, breaking above $2,500. Gold buyers took a breather after a second straight week of gains and moved back up to an all-time high of $2,532.
Gold prices look forward to further gains on US data
The underlying upward tone in gold prices was largely attributed to continued weakness in the U.S. dollar and negative U.S. Treasury yields following dovish comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium on Friday.
Powell explicitly confirmed that the Fed’s easing cycle will begin in September, noting that “now is the time for a policy adjustment. The way forward is clear, and the timing and pace of rate cuts will depend on incoming data, the changing outlook, and the balance of risks.”
“Upside risks to inflation have diminished. Downside risks to employment have increased. As we emphasized in our last FOMC statement, we are focused on risks on both sides of our dual mandate,” Powell added.
Amid these favorable fundamentals, gold prices still face upside risks, with the technical setup on the daily chart also favoring buyers. The next leg higher in gold prices is likely to be driven by the release of U.S. durable goods orders data during the U.S. trading session later on Monday.
Gold price technical analysis: daily chart
The short-term technical outlook for gold prices continues to show upside risks while buyers hold firm above the triangle resistance-turned-support level at $2,470.
Gold prices have held onto an upside breakout of a symmetrical triangle that was confirmed a few weeks ago. The 14-day relative strength index (RSI) is above 50 and is currently approaching 63, suggesting further gains ahead.
Gold buyers need to recapture the all-time high of $2,532 to break through the next key hurdle at $2,550.
A breakout above the latter could challenge the $2,600 round number mark, leading to the triangle target of $2,660.
Conversely, if the gold price fails to sustain higher levels, a correction could unfold towards the $2,500 threshold, below which it could challenge Friday’s low of $2,485.
A sustained breakout of the latter could expose downside risk to the aforementioned triangle resistance (turned support) at $2,470.
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