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Gold Price Forecast: XAU/USD Nears $2,385 Amid Fed Rate Speculations; More Selling Ahead?

In today’s trading, the gold price (XAU/USD) exhibited limited movement, stabilizing around the $2,325 mark, following a significant recovery from recent lows.

Gold Price Chart - Source: Tradingview

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Despite this restraint, the precious metal hovers near the record highs achieved last Friday, bolstered by ongoing geopolitical conflicts in the Middle East and a slight retreat in U.S. Treasury yields.

Federal Reserve’s Interest Rate Strategy

The broader market remains cautious as expectations adjust regarding the U.S. Federal Reserve’s interest rate policy. Current sentiment suggests the Fed may postpone rate cuts due to persistent inflation and robust economic indicators, reinforcing U.S. bond yields and supporting the dollar.
This strength in the dollar, reaching a high since early November, places pressure on gold, traditionally seen as a non-yielding asset.

Economic Indicators and Fed Influence

Investors are now setting their sights on upcoming economic data and Federal Reserve communications for further direction. Today’s agenda includes important speeches from FOMC members, which could provide insights into the Fed’s future monetary policy actions.
Notably, market participants will closely monitor Fed Chair Jerome Powell’s comments for hints at the central bank’s approach to inflation and interest rates.

Market Volatility and Upcoming Data

The gold market’s resilience is also influenced by forthcoming U.S. economic reports, including building permits and industrial production figures, which may impact market volatility and gold prices.
These indicators, alongside Fed officials’ remarks, are pivotal in shaping investor expectations and the subsequent positioning in gold markets.
  • Building Permits are expected at 1.51M, slightly down from 1.52M.
  • Industrial Production is anticipated to increase to 0.4% from 0.1%.
  • Fed speeches throughout the day could sway market sentiment significantly.
In summary, as XAU/USD navigates through economic uncertainties and monetary policy expectations, investors remain vigilant, using these indicators to gauge the potential trajectory of gold prices in a fluctuating market environment.

Gold Price Forecast: Technical Outlook

Today’s trading sees gold marginally up, posting a small gain of 0.09%, with a current price of $2385.18. The metal is testing a pivotal level at $2373, which serves as today’s baseline for potential price movements.
Should gold surpass this pivot, resistance might be encountered at $2401, followed by subsequent barriers at $2419 and $2435. A breach above these levels could signify a stronger bullish momentum.
Conversely, should gold fall below its pivot, immediate support is seen at $2355, with further support levels at $2329 and $2304, which could act as cushions against further declines.
Gold Price Chart - Source: Tradingview
The Relative Strength Index (RSI) is currently at 62, suggesting mild bullish momentum, while the 50-day Exponential Moving Average (EMA) at $2335 supports the trend above this average.
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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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