- Gold price is on the front foot, consolidating recent gains, as August kicks off.
- US Dollar nurses heavy losses with US Treasury bond yields as the Fed leans dovish.
- A test of all-time highs at $2,484 seems inevitable for Gold price amid bullish daily technical setup.
As the world’s top investment manager and financial market journalist, I am here to break down the recent surge in Gold prices and how it can impact your finances. Gold price is soaring in August, fueled by a dovish Federal Reserve and escalating geopolitical tensions in the Middle East.
Gold price cheers dovish Fed. Middle East escalation
Gold price is on a three-day winning streak as the US Dollar and US Treasury bond yields plummet after the Fed’s interest rate decision. The Fed’s Chairman, Jerome Powell, hinted at a possible rate cut in September, sending shockwaves through the market.
Geopolitical tensions between Iran and Israel further boost the safe-haven appeal of Gold price, adding to its bullish momentum.
Despite Powell’s cautious tone, the market believes a rate cut is imminent in September, leading to a rally in Gold prices. The tensions between Iran and Israel only add to the bullish sentiment surrounding Gold.
Gold price is expected to challenge the all-time high at $2,484, but a brief correction may occur before that due to profit-taking and upcoming economic data releases.
Gold price technical analysis: Daily chart
Gold buyers are looking for acceptance above the previous record high of $2,450, with upside targets at $2,475 and $2,484. The RSI indicator suggests bullish potential, but a correction could find support at $2,425 and $2,410.
The key support level for Gold buyers is at the 21-day SMA at $2,405.
What You Need to Know About Gold
Gold is a safe-haven asset that is widely used as a store of value and a hedge against inflation and depreciating currencies. Central banks are the biggest holders of Gold, using it to support their currencies and diversify their reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, making it a popular choice for investors during turbulent times. The price of Gold can be influenced by geopolitical instability, interest rates, and the strength of the US Dollar.
Understanding these factors can help you navigate the market and make informed decisions about your investments. Keep an eye on Gold prices as they continue to rally in the coming months.