Gold (XAU/USD) Daily Forecast: Trading at $2324 Amid Fed Rate Cut Delays

Despite a decline in the US Dollar following unexpectedly high US Purchasing Managers Index (PMI) figures, gold prices remained stable on Tuesday. This resilience stems from Federal Reserve officials’ decision to postpone the anticipated interest rate cuts, thereby capping gold’s potential rise.

Nonetheless, ongoing geopolitical conflicts in the Middle East and Ukraine have bolstered gold’s appeal as a safe-haven asset, supporting its value amidst market volatility.

Anticipated Federal Reserve Actions and Economic Indicators

The focus is now on upcoming communications from Federal Reserve officials, particularly Lisa Cook and Michelle Bowman, whose insights could influence market expectations.

This week is pivotal with the release of crucial US economic indicators: the final Q1 Gross Domestic Product (GDP) figures and the May Personal Consumption Expenditure (PCE) Price Index.

“These indicators are critical barometers of economic health and could dictate the Fed’s monetary policy moving forward,” stated Mary Daly, President of the San Francisco Federal Reserve.

Daly emphasized that rate cuts would only be considered once inflation consistently approaches the 2% target, highlighting the potential for increased unemployment if inflation remains high.

Investor Sentiment and Market Predictions

Market sentiment is cautious yet optimistic about potential Fed actions, with the CME FedWatch Tool indicating a 66% probability of a rate cut in September.

This sentiment is influenced by the anticipated increase in the US headline and Core PCE Price Index, which is expected to confirm a 2.6% year-over-year rise in May. This data will be crucial in shaping future monetary policies and, by extension, the trajectory of gold prices.

This comprehensive analysis aims to provide investors and laypeople alike with a clear understanding of the forces shaping gold’s current market dynamics and future outlook.

Gold Technical Outlook – Price Forecast

Gold (XAU/USD) is trading at $2324.41, down 0.29%. The 4-hour chart reveals a pivot point at $2329.90, which is crucial for traders. Immediate resistance levels are at $2337.56, $2343.84, and $2349.51, indicating potential upward targets.

On the downside, support is found at $2318.07, $2308.01, and $2298.92.The Relative Strength Index (RSI) is at 43, suggesting a neutral market sentiment. The 50-day Exponential Moving Average (EMA) at $2331.72 acts as a resistance.

The overall outlook remains bearish below $2329.90, and breaking above this level could signal a shift towards bullish momentum.

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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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