Gold Price Hits $2,353 Amid Fed Rate Cut Hints and China’s Buying Spree

Gold has reached unprecedented levels, touching $2,353, despite a robust US dollar. This rally is propelled by the anticipated Federal

Arslan Butt•Monday, April 8, 2024•1 min read

Gold has reached unprecedented levels, touching $2,353, despite a robust US dollar. This rally is propelled by the anticipated Federal Reserve rate cuts and China’s aggressive gold acquisition strategy. With the Fed likely to reduce rates in 2024, investors find gold increasingly attractive, given its inverse relationship with interest-bearing assets.

Federal Reserve’s Rate Strategy and Gold’s Lure

The prospect of the Fed easing monetary policy next year enhances gold’s allure. Lower interest rates generally devalue the dollar, heightening gold’s appeal globally.

However, recent robust US job figures and revised Fed rate cut expectations have curbed gold’s ascent, emphasizing the market’s sensitivity to monetary policy signals.

China’s Persistent Gold Purchases Amplify Market Optimism

China’s central bank, through its continued gold reserve expansion for the 17th month, has reinforced gold’s demand. This persistent institutional buying underscores gold’s enduring value and diversification benefits, contributing significantly to its price surge.

Geopolitical Developments and Market Dynamics

Easing tensions in the Middle East, particularly with Israel’s conciliatory moves in Gaza, have somewhat mitigated global risk concerns. This shift has sparked a positive market sentiment, reducing the immediate rush for safe-haven assets like gold.

However, gold’s price trajectory remains influenced by a complex interplay of interest rate forecasts, geopolitical shifts, and major economic indicators.

Gold Price Forecast: Technical Outlook

On April 8, Gold witnessed a minor retracement, closing at $2329.35, a slight decline of 0.05%. The technical chart reveals pivotal support at $2319, marking the current session’s baseline.

Resistance levels are staggered at $2344, $2369, and $2400, whereas support levels are observed at $2304, $2277, and $2252. The Relative Strength Index (RSI) stands at 64, indicating a bullish momentum as it leans towards overbought territory.

The 50-day Exponential Moving Average (EMA) at $2267 corroborates this uptrend, reinforcing the bullish sentiment. Should Gold breach the pivot point of $2319, it may trigger a swift downward movement.

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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.