The price of gold (XAU/USD) continues its upward trajectory, hitting a new peak at 2460 USD per troy ounce on Friday. The surge in gold prices is largely driven by growing expectations that the US Federal Reserve will soon reduce interest rates. This anticipation has been bolstered by recent signals from the Fed’s July meeting and weaker-than-expected US economic data.
Recent US manufacturing activity has declined sharply, and unemployment claims have reached a high of 249,000 for the year, indicating potential economic softening. These factors contribute to the speculation of a possible rate cut by the Fed as early as September, contingent on forthcoming economic reports.
Moreover, escalating tensions in the Middle East enhance gold’s appeal as a safe-haven asset, adding another layer of support for the rising prices.
Technical analysis: XAU/USD
On the H4 chart, XAU/USD performed a growth wave to the level of 2422.22. The market has formed a compact consolidation range around this level, and with the upside exit, the growth wave continues to the level of 2474.50. The target is local. After reaching this level, we will consider the probability of correction to 2422.22 (testing from above). Further, we expect the beginning of a new wave of growth towards 2490.90. Technically, this scenario is confirmed by the MACD indicator, with its signal line above the zero level and trending upwards.
On the H1 chart of XAU/USD, the market has formed a consolidation range around 2446.00. With the upside exit, considering the probability of the wave continuation to the local target of 2474.50 is suggested. After reaching this level, we will consider the likelihood of correction to 2422.22. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line above 80 and preparing for a decline.
Investors and traders should monitor these levels closely, as developments regarding the Fed’s forthcoming decisions and geopolitical factors could significantly impact further movements in the gold market.
Before you enter foreign exchange and stock markets, you have to remember that trading currencies and other investment products is trading in nature and always involves a considerable risk. As a result of various financial fluctuations, you may not only significantly increase your capital, but also lose it completely. Therefore, our clients have to assure RoboForex that they understand all the possible consequences of such risks, they know all the specifics, rules and regulations governing the use of investment products, including corporate events, resulting in the change of underlying assets. Client understands that there are special risks and features that affect prices, exchange rates and investment products.
Recommended Content
Editors’ Picks
EUR/USD trims early gains and hovers around 1.0920 ahead of US data
EUR/USD trimmed early gains and trades just above its daily opening in the European session on Thursday. Market participants await United States macroeconomic data and Fedspeak for near-term guidance in an otherwise sentiment-driven environment.
USD/JPY recovers above 146.00 amid risk aversion
USD/JPY has trimmed losses to regain 146.00 in European trading on Thursday. BoJ's hawkish Summary of Opinions and a risk-off market mood continue to underpin the Japanese Yen, checking the upside attempts in the pair. The focus shifts to US employment data.
Gold price steadies on Middle East conflict, firm Fed rate-cut prospects
Gold’s price (XAU/USD) slightly recovers from a two-day low of $2,380 in Thursday’s European session. The precious metal continues to hold ground due to expectations that the Fed will start reducing interest rates from the September meeting.
Bitcoin price poised for a potential relief rally before continuing its current downtrend
Bitcoin's (BTC) price is recovering from initial weekly losses after a 7% drop on Monday, trading 3.8% higher at $57,245 at the time of writing on Thursday.
Blaring the bear market siren
The market may long for a peaceful passage, but we're gearing up for what looks to be more akin to a rollercoaster expedition. Prepare for a potentially "Turbulent Thursday" and brace for what might become a "Frantic Friday."