Daily Price Outlook
Gold prices (XAU/USD) have continued their upward momentum, bouncing back from a recent one-week low of approximately $1,915. They have surged by over 0.30% in the current trading day and are currently hovering around the $1,925-$1,926 range. However, the upward rally could be associated with the growing concerns regarding a potential global economic downturn and the deteriorating relations between the United States and China, which have prompted some investors towards the gold.
Gold Gains Amid Global Economic Worries and US-China Tensions
It is worth noting that China's recent ban on officials using iPhones for work and US Secretary of Commerce Gina Raimondo's stance that tariffs on China won't change until a Treasury review are adding to the unease. These factors are making investors cautious, and driving up demand for gold as a safe-haven asset, leading to its price increase.
It should be noted that the ongoing uncertainty surrounding China's economic conditions, as well as downward revision of Japan's second-quarter GDP growth, has fueled worries about the possibility of a more global economic slowdown. As a result, investors are increasingly turning to gold as a safe-haven asset in the midst of these uncertainties.
Weaker US Dollar Boosts Gold Amid Fed's Hawkish Stance
Moreover, the slightly weaker US Dollar is providing an additional boost to the Gold price. As we mentioned earlier, investors are increasingly seeking safe havens, resulting in a drop in US Treasury bond yields. Consequently, traders are scaling back their bullish positions on the USD, particularly following its recent climb to the highest level since March 9. Hence, the softer Dollar typically drives up demand for commodities priced in USD, such as gold.
However, there is a growing consensus that the Federal Reserve (Fed) will maintain its hawkish stance, keeping interest rates elevated for an extended period. This anticipation could potentially put a cap on the upward momentum for XAU/USD.
Looking ahead, investors will remain cautious as they await China's inflation data and the upcoming G20 leaders summit this weekend. In the meantime, the overall market sentiment will continue to play a crucial role in influencing Gold's short-term movements.
GOLD(XAU/USD) - Technical Analysis
The gold price began today's trading on a notably positive note, breaking free from the recent intraday bearish constraints. It is now on course to achieve anticipated gains in the forthcoming sessions. Key milestones include surpassing the $1,929 mark, which would signify a trajectory towards $1,945.20 as the next primary target.
Thus, a bullish outlook is forecasted for today, bolstered by optimistic stochastic indicators. It's crucial to note that maintaining above the $1,929 level is pivotal for this bullish wave. Failure to do so could counteract this positive trend and result in a price pullback.
Today's anticipated trading range lies between a support of $1,915 and a resistance of $1,945.
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