Daily Price Outlook
Despite experiencing a recent decline from its daily peak, the price of gold (XAU/USD) remains at a two-month high, benefitting from a weakening US Dollar and sluggish market conditions.
The positive factors supporting the gold price include news from China that is supportive of prices, as well as low yields. Additionally, the People's Bank of China (PBoC) is taking steps to ease rules on foreign investment and is willing to reduce geopolitical tensions with the US if certain conditions are met, which will likely contribute to the strength of the gold price.
Conversely, there are expectations for the Federal Reserve (Fed) to adjust its policy due to weak US housing and consumer expenditure data, leading to calls for a change in interest rates.
Discussions surrounding the positive outlook for US banks and the BRICS countries' interest in using gold-backed currency further bolster the bullish sentiment for XAU/USD. The BRICS countries include Brazil, Russia, India, China, and South Africa.
Recent concerns from major central banks about the potential for higher interest rates, coupled with a lack of optimism in the Asia-Pacific market, have been driving demand for gold.
This trend is particularly noticeable ahead of the upcoming monetary policy meeting of the Federal Open Market Committee (FOMC), which is scheduled to take place the following week.
The gold price forecast for XAU/USD indicates a fresh two-month high and suggests the potential for further appreciation. After a brief pause, the price of gold has regained momentum and reached new highs during the Asian session, currently trading in the range of $1,984 to $1,985.
This upward trend is expected to continue based on the steady upward movement observed over the past three weeks or so.
Gold (XAU/USD) Technical analysis
The price of gold has successfully surpassed the level of $1,977.25, closing the previous four-hour candlestick above it. This development indicates the potential for a continued bullish trend in the short-term and intraday scenarios. As a result, new target levels are now in focus, beginning at $2,000.00 and followed by $2,016.90.
The upward movement is supported by a bullish channel, which receives significant reinforcement from the EMA50 indicator. However, if the price breaks below the level of $1,977.25, the anticipated rise may be halted, leading to a potential reversal and a shift towards a decline.
For today's trading, it is expected that the support level will be around $1,970.00, while resistance is likely to be encountered at $2,005.00.
Overall, the outlook for today suggests a bullish trend in the gold market, but it is important to monitor the price action closely for any potential reversals or shifts in the market sentiment.
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