Gold Price Forecast: XAU/USD Hits $2,313 Amid US Dollar Surge, Geopolitical Calm

As observed, the gold price (XAU/USD) experienced a downtrend, with prices lingering around the $2,313.91 mark, dipping to a daily low of $2,312.53.

Arslan Butt•Wednesday, April 24, 2024•2 min read

As observed, the gold price (XAU/USD) experienced a downtrend, with prices lingering around the $2,313.91 mark, dipping to a daily low of $2,312.53.

This movement reflects the robust performance of the US dollar, which surged despite the disappointing Purchasing Managers’ Index (PMI) data from the US, indicating a slowing economic expansion in the early second quarter.

April’s S&P Global Composite PMI fell to 50.9, a subtle hint at a decelerating pace in private sector activity, compounded by an unexpected contraction in the manufacturing sector.

These dynamics suggest a sustained high-interest rate environment by the Federal Reserve, dampening the attractiveness of non-yielding assets like gold.

Easing Geopolitical Tensions Reduce Safe-Haven Demand

The reduction in geopolitical tensions, particularly between Israel and Iran, has positively influenced global market sentiment, further diminishing the demand for gold as a haven.

Despite ongoing regional conflicts, signals of de-escalation have emerged, reducing the likelihood of broader military engagements and, subsequently, the urgency for safe-haven assets.

Technical Analysis: Key Levels and Indicators for Gold

Turning to the technical landscape, the immediate outlook for gold prices shows a slight recovery, with a 0.20% increase to $2,324.95, positioning just above the critical support level of $2,317.10.

Resistance points are mapped at $2,346.21 and $2,359.26, with a more formidable barrier at $2,382.85, which could signal a bullish reversal if surpassed. Conversely, support levels are set at $2,290.91 and $2,268.20, providing potential buying opportunities should prices dip to these points.

The Relative Strength Index (RSI) at 40 points to a balanced market state, neither overbought nor oversold, hinting at potential shifts without significant buying or selling pressure.

Meanwhile, the 50-day Exponential Moving Average (EMA) at $2,364.13 underscores a recent downtrend, yet offers a potential pivot for upward movement as prices near this average.

Notably, gold has surpassed the 23.6% Fibonacci retracement, eyeing the 38.2% level at approximately $2,333, which could encourage further gains if sustained.

Investors might consider a strategic approach with a buy limit order at the pivot point of $2,317, aiming for a take profit near the immediate resistance of $2,346, and a stop loss positioned at $2,296 to safeguard against potential declines.

This strategy capitalizes on the current market dynamics, aligning with both fundamental influences and technical indicators to optimize potential returns in the XAU/USD market.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

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.