- Federal Reserve to Maintain Rates Ahead of Potential September Cut
- Jerome Powell’s Monetary Policy Clues Could Influence Market Sentiment
- XAU/USD Eyes Further Gains Amid Dollar Weakness and Stock Market Optimism
Spot Gold is currently trading at one-week highs of $2,428 per ounce as investors await the Federal Reserve’s latest monetary policy decision. The US Dollar is mixed against major currencies, strengthening against European pairs but weakening against commodity-linked currencies. Stock markets are rising on expectations of a looser monetary policy from the Fed.
Chairman Jerome Powell is likely to keep interest rates steady for now but may hint at a potential cut in the upcoming September meeting. The market has already priced in a rate cut next month, with speculation growing about further easing by the end of the year. Powell’s post-meeting press conference will provide more insights into the Fed’s future actions.
According to the CME FedWatch Tool, there is a 70% probability of a total 75 basis points rate cut by the end of 2024.
Technical Analysis for XAU/USD
On the daily chart, XAU/USD shows potential for further gains, supported by USD weakness and a dovish Fed stance. The pair is trading above key moving averages and technical indicators are positive, though lacking strong direction. The recent bounce from the 61.8% Fibonacci retracement level suggests bullish momentum, with the 38.2% retracement at $2,410.80 acting as immediate support.
In the short term, the 4-hour chart signals upside bias, despite fading momentum. Technical indicators remain bullish, with the 20 SMA set to cross above the 100 SMA. The next resistance level is at $2,438.75.
Support: $2,410.80, $2,400.00, $2,388.25
Resistance: $2,438.75, $2,451.10, $2,464.30
Analysis:
The current Gold price surge is driven by market expectations of a dovish Fed and potential interest rate cuts. Investors are positioning themselves for future policy actions, with Gold seen as a safe-haven asset in times of uncertainty. Traders should monitor Powell’s comments closely for any hints on future monetary policy decisions, which could impact Gold prices significantly.