Gold (XAU/USD) Price Soars Past $2,250: Inflation and Fed Policy Shifts in Focus

The Gold (XAU/USD) price forecast remains optimistic as it ascends for the fifth consecutive day, surpassing the $2,250 mark in the Asian trading session.

The moderate inflation rise in February, as shown by the US Personal Consumption Expenditures (PCE) Price Index, fuels speculation of an impending rate cut by the Federal Reserve in June, bolstering the appeal of the non-yielding gold.

• Inflation and Federal Reserve’s Policy Outlook: The PCE data underpins expectations for a June rate reduction, enhancing gold’s attractiveness as a hedge against inflation and currency depreciation.
• Geopolitical Uncertainties Enhance Safe-Haven Appeal: Ongoing tensions in Eastern Europe and the Middle East contribute to gold’s status as a refuge asset, despite a general risk-on market sentiment.
• Technical Analysis and Market Dynamics: The breach above the $2,223 level signifies a bullish continuation for XAU/USD, with the market’s eyes set on upcoming US economic data, including the ISM Manufacturing PMI and Non-Farm Payroll (NFP) report.

Despite a slight USD recovery, gold’s trajectory appears upward, driven by geopolitical risks and market anticipation of the Fed’s monetary policy adjustments. The focus now shifts to forthcoming US economic releases for further market direction.

Gold Price Forecast: Technical Outlook

Gold (XAU/USD) experienced a significant uptick, reaching $2,259.57, a 1.21% increase, signalling strong market interest.

The pivot point at $2,232.74 remains crucial; surpassing this level maintains the bullish momentum, with resistance points at $2,271.68, $2,294.17, and $2,315.44 marking potential targets for continued ascent.

Conversely, support levels at $2,211.51, $2,194.17, and $2,173.30 provide downside protection. The Relative Strength Index (RSI) stands high at 82, indicating overbought conditions that could lead to a price pullback, while the 50-day EMA at $2,185.92 supports the ongoing bullish trend.

As Gold hovers above $2,240, the outlook remains bullish, but falling below this threshold could trigger a significant correction.