GOLD Price Analysis – July 17, 2024

Daily Price Outlook

Gold price (XAU/USD) regained its upward trend and drew strong bids around the 2,475.99 level, hitting an intraday high of 2,482.41. The upward rally can be attributed to growing expectations that the Federal Reserve will begin cutting interest rates as early as September.

This put downward pressure on the US dollar and contributed to the gains in the gold price

Impact of Fed Rate Cut Expectations on Gold Prices

On the US front, the broad-based US dollar has lost momentum as investors anticipate rate cuts by the Federal Reserve starting in September.

This belief has kept US Treasury bond yields near multi-month lows, preventing the dollar from rebounding from its recent three-month low. Federal Reserve officials, including Chair Jerome Powell and San Francisco Fed President Mary Daly, have signaled that inflation is nearing their target, reinforcing expectations of rate cuts.

This outlook has led traders to price in multiple rate cuts by year-end, boosting non-yielding assets like gold, which benefits from lower interest rates. US Retail Sales data for June showed no change, with upward revisions in May indicating consumer resilience, supporting economic growth prospects for the second quarter.

Therefore, the anticipation of Fed rate cuts, reinforced by near-record low Treasury yields and Federal Reserve officials' inflation outlook, has boosted gold prices as investors seek safe-haven assets amid lower interest rates.

GOLD (XAU/USD) - Technical Analysis

Gold (XAU/USD) is trading at $2,465.89, showing slight market adjustments as it approaches significant resistance levels. The 4-hour chart reveals pivotal price points that are essential for traders to watch closely.

The pivot point is positioned at $2,478.20, indicating a critical level for potential market shifts. Immediate resistance is identified at $2,495.71, followed by $2,511.63 and $2,529.15. These resistance levels represent potential upward targets if the price manages to break above the pivot point, signaling a continuation of the bullish trend.

On the downside, immediate support is noted at $2,443.97, with further support levels at $2,419.30 and $2,397.41. These levels are crucial for maintaining the current trend and could serve as buffers against any sharp declines.

The Relative Strength Index (RSI) is currently at 75, indicating that the market is in an overbought condition. This suggests that there might be limited room for further upward movement before a potential correction.

The 50-day Exponential Moving Average (EMA) is at $2,397.94, which provides additional support and aligns with the lower support levels. This EMA acts as a significant indicator of the underlying trend and helps identify potential reversal points.

In conclusion, Gold remains bearish below the pivot point of $2,478.20. A break above this level could boost bullish sentiment, targeting the resistance levels of $2,495.71 and beyond.

Conversely, maintaining below the pivot point suggests continued downside risk. Traders are advised to sell below $2,478, with an entry price at this level, aiming for a take profit at $2,449 and setting a stop loss at $2,495.

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