Gold Price Forecast: XAU/USD Hovers Near $2,652 Amid US Rate Cut Expectations and Geopolitical Tensions

During the European trading session, gold prices (XAU/USD) are hovering near $2,652 as investors react to a more risk-on sentiment, spurred by China’s new economic stimulus.

Investors are shifting to higher-yielding assets like stocks and bonds, making gold less attractive as a safe-haven asset. However, a sharp decline in gold prices isn’t expected due to the weakening U.S. dollar, driven by the Federal Reserve’s dovish stance.

Additionally, ongoing geopolitical tensions in the Middle East and uncertainty ahead of the U.S. presidential election continue to support demand for gold, as investors seek refuge in safer assets amidst global uncertainty.

US Economic Data and Rate Cut Expectations Push Gold Higher

Gold has also gained traction from weak U.S. economic data. The Richmond Manufacturing Index dropped to -21, and the Consumer Confidence Index fell to 98.7 in September, reflecting growing concerns about the economic outlook. With the market now estimating a 75% chance of a 50-basis-point rate cut by the Federal Reserve in November, the U.S. dollar continues to face downward pressure.

Key events to watch include speeches from Fed Chair Jerome Powell and the release of the U.S. Personal Consumption Expenditure (PCE) Price Index, which could further impact gold prices by influencing investor sentiment on future rate cuts.

Geopolitical Tensions Bolster Gold as a Safe-Haven Asset

Ongoing geopolitical tensions in the Middle East—specifically the conflict between Israel and Palestine—are also keeping demand for gold strong. The rising casualties and escalating conflict are driving investors toward safer assets like gold. As the U.S. presidential election approaches, political uncertainty adds further complexity to the global outlook, supporting gold prices.

With over 41,000 casualties reported in Gaza and rising instability, gold remains a preferred safe-haven asset amidst ongoing global tensions.

Technical Outlook for Gold

Gold (XAU/USD) is currently trading at $2,652.43, down 0.18%. Key levels include:

GOLD Price Chart - Source: Tradingview
  • Immediate resistance: $2,670.90
  • Immediate support: $2,648.18
  • 50-day EMA: $2,637.30

Traders are recommended to adopt a cautious stance, with selling opportunities below $2,657 and a target of $2,640, while placing a stop-loss at $2,674.

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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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