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Weekly Gold Price Forecast: Rising to $2080, A Recap and Upcoming Events

Gold price closed the week at $2080, marking a 2.33% rise. The recent surge in gold buying can be attributed to a series of economic events that underscored growing concerns about the health of the U.S. economy and the global financial landscape.

Gold Price Forecast

Notably, a decline in New Home Sales to 661K against an expected 680K and a significant drop in Durable Goods Orders by -6.1% month-over-month, far below the anticipated -4.9%, triggered investor worry, driving them towards the safe haven of gold.

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Furthermore, the Core Durable Goods Orders also fell short of expectations, hinting at underlying weaknesses in consumer spending and manufacturing strength.

Events Recap: Key Events That Fueled Gold’s Rally:

  • Durable Goods Orders plummeted by -6.1%.
  • New Home Sales fell to 661K missing forecasts.
  • A disappointing Richmond Manufacturing Index at -5, alongside lower than expected CB Consumer Confidence at 106.7, compounded economic apprehensions.
  • G20 Meetings and comments from FOMC Member Mester further influenced market sentiment, amidst mixed signals from other economic indicators such as the Prelim GDP q/q showing a stable 3.2% growth, and the ISM Manufacturing PMI registering a contraction at 47.8.

These economic indicators, combined with ongoing G20 discussions, painted a picture of uncertainty and potential slowdown, compelling investors to flock to gold as a protective measure against market volatility and economic downturns.

Economic Events In the Coming Week

Understanding how key economic indicators and events can influence gold prices is essential for investors. Here’s a breakdown of this week’s events and their potential impact on gold:

  • Tuesday: ISM Services PMI
    • A figure above 53.4 indicates a healthy service sector, potentially reducing gold’s appeal.
    • A lower figure could raise economic health concerns, boosting gold’s safe-haven status.
  • Wednesday: ADP Non-Farm Employment Change & Fed Chair Powell Testifies
    • Strong job additions suggest economic robustness, possibly decreasing gold’s allure.
    • Weak job growth or cautious tones from Powell could drive investors towards gold.
  • Thursday: Unemployment Claims & Fed Chair Powell Testifies Again
    • Rising unemployment claims may signal economic instability, potentially increasing gold prices.
    • Powell’s insights on monetary policy could sway gold prices based on future economic outlooks.
  • Friday: Key Employment Reports
    • Average Hourly Earnings m/m: High wage growth signals economic strength, potentially lowering gold demand.
    • Non-Farm Employment Change: High job additions could indicate economic health, reducing gold’s appeal.
    • Unemployment Rate: An unchanged rate at 3.7% might have a neutral effect, but any surprises could sway gold prices.

In essence, strong economic indicators may lead to lower gold prices as confidence in traditional investments grows. Conversely, signs of economic weakness or uncertainty could make gold a more attractive safe haven, pushing prices higher.

For those new to investing, these indicators provide valuable insights into the potential direction of gold prices in the face of economic fluctuations.

Gold Price Prediction: Technical Outlook

Gold price surged to $2082, marking a 1.88% increase, reflecting a bullish momentum in the market. The 4-hour chart reveals critical price levels with a pivot point at $2066. Resistance is observed at $2088, $2104, and $2118, suggesting potential hurdles for further upward movements. Conversely, support lies at $2051, $2034, and $2017, which could stabilize prices if a pullback occurs.

Gold Price Forecast

The Relative Strength Index (RSI) has reached the overbought territory at 80, indicating potential exhaustion among buyers and the possibility of a forthcoming correction.

Additionally, the 50-Day Exponential Moving Average (EMA) at $2037 supports the uptrend but cautions of a potential reversal if gold fails to sustain above the immediate resistance level of $2088. The appearance of a Doji candle underscores market indecision, hinting at sellers’ readiness to enter the market.

In summary, while gold displays a bullish trend, its current position below $2088 combined with overbought conditions suggests a cautious outlook. A breach above this level may reinforce bullish sentiments, yet the risk of a bearish correction looms, urging investors to monitor these key levels closely.

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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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