The price of gold continues its impressive ascent, balancing around $2500 per troy ounce early this week, hovering near record peaks. This surge is primarily fueled by the increasing demand for safe-haven assets in the face of ongoing geopolitical tensions.
The current focus is on the conflict in the Middle East, with U.S. Secretary of State Antony Blinken scheduled to participate in ceasefire talks between Israel and Gaza. However, the fluctuating news from the region casts doubt on the success of these negotiations, further boosting gold’s appeal as a secure investment.
Adding to gold’s rally are market expectations surrounding the upcoming actions of the U.S. Federal Reserve. Despite strong economic indicators, inflation is inching closer to the Fed’s target, leading to speculation about potential interest rate reductions. Investors are currently anticipating a 25 basis point cut in September, with the possibility of additional cuts throughout the year, potentially totaling 75-100 basis points.
This week is crucial for gold investors, with the Federal Reserve scheduled to release the minutes from its recent meeting and a speech by Fed Chairman Jerome Powell. These events are expected to provide clarity on the Fed’s stance on monetary policy, influencing the future trajectory of the XAU/USD price forecast.
Technical Analysis of XAU/USD
On the H4 chart, gold has completed a growth structure reaching $2509.00. Currently, a consolidation pattern is forming below this peak, with expectations leaning towards a downward breakout, potentially initiating a decline towards $2426.44 and extending down to $2347.55. This bearish outlook is technically supported by the MACD indicator, where the signal line is poised to move downward from above the zero level.
On the H1 chart, gold has reached the upper boundary of its latest growth wave at $2509.77, followed by the formation of a tight consolidation range. Anticipations are set for a downward movement, targeting a decline to $2468.00 with a further potential to reach $2426.90. This bearish perspective aligns with the Stochastic oscillator’s signal line, which is expected to drop from below 80 to 20, indicating a potential selloff in the near term.
As geopolitical events unfold and the Federal Reserve’s monetary policy becomes clearer, gold’s price dynamics are expected to remain a focal point for investors seeking stability during uncertain times.
