Gold Price Forecast: XAU/USD reaches fresh record highs above $2,460

Valeria Bednarik FXStreet

XAU/USD Current price: $2,459.10

Market participants increased bets on a Federal Reserve’s September rate cut.
Encouraging United States macroeconomic data backed the generalized optimism.
XAU/USD bullish momentum supports another leg north in the upcoming sessions.

Gold reached fresh all-time highs on Tuesday, trading in the $2,460 price zone mid-American afternoon. The bright metal rallied despite a firmer US Dollar, the latter benefiting from better-than-anticipated United States (US) Retail Sales. The US Census Bureau reported that Retail Sales remained unchanged in June as expected, although the core reading, Retail Sales Control Group, improved to 0.9% from 0.4% in May.

Still, XAU/USD rally could be explained by mounting speculation the Federal Reserve (Fed) will deliver an interest rate cut as soon as September. According to the CME FedWatch Tool, the odds for a 25 basis points (bps) rate cut stand at 93.3%, while the chance of a 50 bps cut stands at 6.7%. Investors rushed into betting on upcoming lower interest rates after Fed Chairman Jerome Powell spoke at the Economic Club of Washington DC on Monday.

Among other things, Powell said that the economy performed remarkably well in the last couple of years, while easing inflation in the second quarter builded up confidence. Nevertheless he also noted that upcoming decisions will be made meeting-by-meeting, based on evolving data and the outlook.

Wall Street rallied to fresh record highs on Monday, only to surpass them in the current session. Optimism reigns among investors and the US Dollar trades oddly mixed across the FX board, partially benefiting from upbeat macroeconomic data, yet with the upside limited amid the risk-on mood.

XAU/USD short-term technical outlook

The bright metal has room to extend its gains according to technical readings in the daily chart. XAU/USD holds far above all its moving averages, which offer sharp upward slopes. At the same time, technical indicators accelerated north, approaching overbought territory without signs of giving up.

In the near term, and according to the 4-hour chart, XAU/USD is overbought, yet a corrective decline remains out of the picture. A firmly bullish 20 Simple Moving Average (SMA) leads the way north, providing dynamic support at around $2,420. The 100 and 200 SMA also head higher below the shorter one, in line with increased buying interest. Finally, the Momentum indicator maintains its bullish slope at extreme levels, but the Relative Strength Index (RSI) indicator turned flat at around 76, suggesting a pause before the next directional movement.

Support levels: 2,448.90 2,435.10 2,422.65

Resistance levels: 2,465.00 2,480.00 2,493.00

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD holds losses below 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot below 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand and reports that ECB President Lagarde will step down before the end of her term. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.