Gold Heads for New Record Highs As Dips Remain Supported
On Monday Gold tumbled below $2,400, but technical indicators held as support, while fundamentals provided fuel to push XAU toward new highs
On Monday Gold tumbled below $2,400, but technical indicators held as support, while fundamentals provided fuel to push XAU toward new highs. The price has made quite a comeback in the last three days, surging $100 higher from the lows and the Gold buyers are now targeting the all-time high at $2,483.67 from July.
Last week highlighted the resilience of gold as it found solid support during market declines. With rising lows, new record highs for gold seem within reach. After a sharp dip early in the week due to market turmoil, gold (XAU) has regained its bullish momentum, climbing above $2,450. The stabilization of financial markets has allowed buyers to maintain their hold, with both technical and fundamental factors favoring further gains in gold.
Gold Chart Weekly – The 20 SMA Holding As Support
This week’s retail sales data and the US inflation report could push XAU to all-time highs. The upcoming release of the US Producer Price Index (PPI) on Tuesday, followed by the Consumer Price Index (CPI) on Wednesday, and Retail Sales data on Thursday, are key indicators that could influence the Federal Reserve’s monetary policy decisions. These reports are likely to play a crucial role in determining the strength of the US Dollar and, consequently, the risk sentiment and price action in the Gold market, particularly as Gold gets within reach of the previous high.
Support for Gold Amid Global Uncertainty
Following the earlier plunge, gold reversed course last week, gaining more than $100 from its low of $2,364. This rebound pushed the price back above the 20 SMA (gray) on the weekly chart, a level that sellers were unable to break, so the 20-week SMA continues to serve as a strong support indicator pushing the lows higher. There is optimism in the market as gold has been making a series of higher lows since 2022. With the global economy slowing and the Federal Reserve, along with other major central banks, entering a cycle of rate cuts, there is a compelling case for buying gold dips.
However, potential risks remain, including the ongoing risk premium due to Middle East tensions. The situation in the region remains volatile, with the Gaza War and increased US military presence adding to the uncertainty. In light of dovish forecasts from the Federal Reserve, these developments could increase the likelihood of a broader conflict in the area, further supporting gold as a safe-haven asset.
Gold Live Chart
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