Gold Price Forecast: $4,000 Support Holds as Traders Eye Fed Rate Cut
Gold prices dangle near $4,000 level on Tuesday as the dollar falls. After a wild week of dollar fluctuations and central bank jitters...
Quick overview
- Gold prices are hovering near the $4,000 mark as the U.S. dollar experiences a slight decline.
- Market attention is focused on the upcoming Federal Reserve meeting, where a 25 basis-point rate cut is anticipated.
- Optimism surrounding a potential US-China trade deal is contributing to gold's appeal amid ongoing economic uncertainties.
- Technically, gold faces resistance around $4,046, with potential breakout levels identified if it can close above $4,050.
Gold prices dangle near $4,000 level on Tuesday as the dollar falls. After a wild week of dollar fluctuations and central bank jitters, gold prices are finding some traction again on Tuesday. The U.S. dollar slipped 0.1 percent, making gold more affordable for international buyers.
The markets remain fixated on the Federal Reserve’s policy meeting, where just about everyone expects another 25 basis-point rate cut. Traders will also be hanging on to Fed Chair Jerome Powell’s every word in his forward guidance, which could have a big say in where gold is headed in the short term. Lower rates like these make it more attractive to hold non-interest-bearing assets like gold, which is a boost for the gold bulls.
Gold Trades On Hopes of Trade Deal & Central Bank Moves
The optimism around the US-China trade deal has also had its say here – over the weekend, senior officials from both countries did some pretty serious talking about a framework for a deal that’s supposed to be finalized this week by Presidents Trump & Xi. Now, even with a trade deal maybe on the cards, many analysts think the overall economic backdrop—slower growth, monetary easing, and geopolitical worries—will keep supporting gold for the long haul.
[[XAG/USD-graph]]
Over in Europe, it’s looking like the ECB and Bank of Japan are going to keep interest rates steady this week, further reinforcing the whole “central banks are getting cautious ” vibe.
Gold (XAU/USD) Technical Outlook: Bears Still in Charge
Looking at the technicals, gold is still facing short-term pressure; it’s stuck in a descending channel on the 4-hour chart near $3,976 & the 20 EMA at $4,046 is still acting as a major resistance level. At $34, the RSI indicates gold is oversold.
If gold somehow manages to close above $4,050, it may trigger a breakout to $4,150 and $4,273, which is in line with the 50 EMA. But if it can’t hold above $3,944, then it may be heading for a bigger fall into $3,836 or even $3,732.
Trading Perspective
- Buy near $3,944 if you see a bullish reversal candle; then you’re targeting $4,150.
- Stop and chop below: $3,836 to limit your losses.
Gold has already made a 53% gain this year, peaking at $4,381.21 back on October 20—and that’s all thanks to central bank buying and rate-cut expectations. As the Fed and other central bankers keep loosening the purse strings (so to speak!), gold’s ability to stay above $4,000 could define where the market goes next—and whether we’re in another phase of the bull cycle for gold.
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