Gold Price Forecast: XAU/USD at $2,425 Amid Strong Dollar and Rising Unemployment

Gold (XAU/USD) remains under pressure, trading near a multi-day low at around the $2,425 level during Friday’s Asian session.

This downward movement is largely driven by the U.S. Dollar (USD), which continues to strengthen following its recovery from a four-month low. This strengthening has pushed gold lower for the third consecutive day.

Market Response to Economic Indicators:

The U.S. Bureau of Labor Statistics reported an increase in unemployment claims for the week ending July 13, with 243,000 Americans filing for benefits.

This figure marks an uptick from the previous count and pushes the 4-week moving average to its highest in over two and a half years, indicating a softening labor market.

Despite this, expectations for Federal Reserve rate cuts remain, with the CME Group’s FedWatch Tool showing a 100% likelihood of a reduction in September and two additional cuts by the end of the year.

Geopolitical Tensions Support Gold’s Safe-Haven Appeal:

Further underpinning gold’s value are ongoing geopolitical tensions and increased central bank demand, which mitigate more significant declines in the non-yielding asset.

Notably, recent comments by former President Donald Trump regarding Taiwan’s defense contributions have stirred uncertainties about U.S. commitments, adding to the safe-haven appeal of gold amid global instability from ongoing conflicts in the Middle East and the Russia-Ukraine war.

Gold Price Forecast – Technical Outlook

Gold (XAU/USD) is trading at $2,425.29, reflecting a 0.83% decline. The 4-hour chart shows a pivot point at $2,420.91. Immediate resistance levels are at $2,435.88, $2,451.78, and $2,471.06. Immediate support is found at $2,406.79, with further support at $2,392.37 and $2,378.85.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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