GOLD Price Analysis – July 30, 2024
Daily Price Outlook
Gold (XAU/USD) has continued its upward momentum, recently reaching an intra-day high of 2,392 after climbing around the 2,390 mark. This rally is largely driven by expectations of a September Fed rate cut, which diminishes the value of the US dollar and bolsters gold prices.
Additionally, ongoing geopolitical tensions in the Middle East are further supporting gold as a safe-haven asset.
However, Bank of America suggests that the strong US economy might lead the Fed to delay rate cuts until December. This potential postponement indicates that the Fed views the economy as robust enough to forgo immediate stimulus, which could result in a stronger US dollar in the short term.
Investors might interpret this as a sign of economic resilience and a commitment to maintaining higher rates for an extended period.
Impact of Federal Reserve Rate Cut Expectations on Gold and US Dollar
On the US front, the US dollar might face challenges as expectations rise for a Federal Reserve rate cut in September. With signs of cooling inflation and a softer labor market, there’s speculation about three rate cuts this year.
The Fed’s decision on interest rates will be closely watched on Wednesday. On Friday, the US Personal Consumption Expenditures (PCE) Price Index for June increased by 2.5% year-over-year, slightly down from 2.6% in May, and rose by 0.1% monthly.
Core PCE inflation, excluding food and energy, climbed to 2.6% in June, matching May’s rise and above the 2.5% forecast.
On the flip side, Bank of America believes that the strong US economy allows the Federal Reserve to hold off on changes for now. They think the Fed can wait and will likely start cutting rates in December, as the economy remains robust.
Thus, the expectations of a Federal Reserve rate cut could support Gold prices, as lower rates generally make non-yielding assets like Gold more attractive. However, if the Fed delays cuts, Gold might face downward pressure due to a stronger dollar.
GOLD (XAU/USD) - Technical Analysis
Gold (XAU/USD) is trading at $2,391.16, reflecting a stable performance amidst global market fluctuations. The pivot point at $2,400.00 is a crucial level, acting as both a psychological barrier and a technical marker.
Immediate resistance is identified at $2,403.34, with subsequent resistance levels at $2,427.28 and $2,451.43. On the downside, immediate support is seen at $2,353.64, followed by stronger support levels at $2,337.61 and $2,321.18.
The Relative Strength Index (RSI) is at 50, indicating neutral market sentiment. This balanced RSI suggests that gold is neither overbought nor oversold, providing room for potential upward or downward movement based on forthcoming market cues.
The 50-day Exponential Moving Average (EMA) is positioned at $2,401.71, slightly above the current price.
This proximity to the EMA highlights a critical juncture; a sustained move above this level could signal bullish momentum, whereas failure to breach this threshold might reinforce bearish trends.
The current market scenario suggests a strategic entry point for traders looking to capitalize on gold's stability. An entry price above $2,380 is recommended, targeting a take profit level of $2,400. A stop loss should be set at $2,365 to mitigate potential downside risks.
Related News
USD/CAD Price Analysis – July 30, 2024
JOIN LONGHORNFX TODAY
24/7 live support, lightning fast withdrawals, guaranteed safe and reliable trading platforms with a true ECN broker.