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Gold Price Forecast: XAU/USD Surges to $2,410 Amid Israeli-Iran Tensions
Arslan Butt•Friday, April 19, 2024•2 min read
Gold prices (XAU/USD) surged to a high of nearly $2,410 per troy ounce during the Asian trading session on Friday, driven by escalating geopolitical tensions that bolstered its safe-haven status.
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The spike in gold prices was triggered by reports from ABC News of an Israeli missile attack on Iran, heightening fears of further escalation in the Middle East.
Impact of Middle East Tensions on Gold Prices
Further reports from Reuters, citing Iran’s Fars News Agency, noted that explosions were heard at Isfahan airport, although the origins of these explosions remain undetermined.
This situation has intensified the global market’s risk aversion, pushing investors towards the security of gold.
Fed’s Hawkish Stance Dampens Gold’s Rally
On the domestic front, the U.S. Dollar gained strength following hawkish remarks from Federal Reserve officials, which, in turn, pushed up U.S. Treasury yields.
This strength in the dollar and yields has applied downward pressure on gold, a non-yielding asset, making it more costly for investors holding other currencies. Atlanta Fed President Raphael Bostic pointed out the persistently high U.S. inflation rates, indicating ongoing monetary tightening.
Concurrently, New York Fed President John Williams advocated a data-dependent approach, signalling no immediate rate cuts.
Key Economic Indicators Impacting Market Sentiment
Recent U.S. economic data also played a role in shaping market dynamics:
- U.S. Unemployment Claims slightly decreased to 212K from the previous 215K.
- The Philly Fed Manufacturing Index unexpectedly surged to 15.5, marking a significant jump from earlier forecasts.
- U.S. Existing Home Sales marginally declined to 4.19 million from 4.20 million, underscoring ongoing challenges in the housing market.
These economic indicators, combined with the Fed’s current policy stance, are crucial in influencing the Gold (XAU/USD) price forecast, providing insights into the potential directions the precious metal’s value could take amid fluctuating market conditions and geopolitical developments.
Gold Price Forecast: Technical Outlook
Gold’s price has advanced to $2389.17, marking a 0.42% increase. Currently, the metal is trading above its pivot point of $2377.95, indicating potential for continued upward movement.
Resistance levels are identified at $2397.52, followed by $2431.73 and $2461.89, each pivotal for determining Gold’s capacity to climb further. Conversely, support levels for Gold are established at $2355.45, $2327.10, and $2304.10.
These values not only highlight potential stabilization points during price declines but also delineate the lower limits of market fluctuations. Reaching these levels could attract buyers, potentially revitalizing bullish momentum in the market.
Technical indicators further support this outlook. The Relative Strength Index (RSI) is at 56, indicating sustained bullish momentum without entering overbought territory, suggesting there is still potential for price growth.
Additionally, the 50-day Exponential Moving Average (EMA) at $2366.43 provides strong support, reinforcing the upward trend as long as prices stay above this average.
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ABOUT THE AUTHOR
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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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