Gold Price Prediction: XAU Tops $4,210 as Rate-Cut Bets and Dollar Weakness Fuel Bullish Momentum
Gold is still on a roll, breaking through its highest level in over three weeks as more people become optimistic about US interest...
Quick overview
- Gold prices have surged to around $4,210, driven by optimism over US interest rate cuts and a weaker dollar.
- Analysts predict a potential pullback after the recent upswing, but the long-term outlook for gold remains positive.
- Economists expect the Federal Reserve to cut interest rates by a quarter of a percent next month, increasing gold's appeal as a safe haven.
- Traders are advised to buy on dips, targeting a price increase to $4,307 and beyond, as long as gold remains above $4,097.
Gold is still on a roll, breaking through its highest level in over three weeks as more people become optimistic about US interest rate cuts and a weaker dollar, making gold more attractive to buyers. Prices have nudged up to around $4,210, amid expectations that the US government will reopen soon, which will give the Federal Reserve more information to go on when it decides on interest rates ahead of December’s big meeting.
Reliance Securities Senior Analyst Jigar Trivid is saying, “Gold’s gain is largely due to the weakening dollar, hopes of rate cuts from the Fed, and the ongoing buying by central banks.” He noted, though, that after any big upswing, a pullback is likely, but Trivid still thinks the long-term picture for gold looks good.
Economists surveyed by Reuters expect the Fed to cut its interest rate by a quarter of a percent next month, with 80% now expecting the Fed to head in a more relaxed direction. This means the idea of gold as a safe haven that doesn’t pay interest is becoming increasingly appealing.
Gold (XAU/USD) Technical Picture: Bulls Setting Sights at $4,307
Technically speaking, gold is still going up in a clear uptrend pattern—and if you look at the charts, you can see we’ve got higher highs and higher lows—basically the opposite of a bear market. The price has bounced back from the $4,130 support line and is now testing the middle line of the channel, and key buying signals were triggered when it hit that level.
A big, long, white candle has shown that buyers are back in control.
The short term indicators are saying that the bulls are in charge right now – the 20 day average is above the 50 day average so momentum is pretty clearly in favour of the buyers – and the RSI is ticking over at 74 – which means that a small pullback might happen before the next big push higher – maybe down to the $4,180 – $4,140 zone.
So if you want to keep going up, then a stop at $4,100 is your target to break through the $4,243 resistance line and the upper channel boundary at $4,307, which was a high point in October.
Gold (XAU/USD) Trading Outlook: Buy on a Dip
For traders, there’s a buy signal when the price breaks through the $4,180 line – that’s your target to get to $4,307, then on to $4,374 – with a stop below $4,100 to limit your losses. As long as gold stays above $4,097, the trend remains intact.
With rate cuts on the way around the world and more and more people wanting a safe-haven asset like gold,, we can expect the price to reach $4,300 and potentially higher before the end of the year.
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