XAU/USD Price Analysis: Gold Surges as Fed Rate Cut Speculation Grows
- Fed rate cut speculation weighs on US Dollar, boosting Gold prices.
- US to release July CPI data, influencing Fed’s decision on rate cuts.
- XAU/USD expected to continue rising despite near-term overbought conditions.
Gold prices continued their rally on Monday, surpassing $2,460 per ounce, driven by weakening demand for the US Dollar. Geopolitical tensions in the Middle East also supported Gold’s rise, with concerns about a potential attack from Iran on Israel escalating. This uncertainty has fueled investor demand for the safe-haven asset.
The surge in Gold prices is largely attributed to speculation that the Federal Reserve will cut interest rates in its upcoming September meeting. The possibility of a 50 basis points rate cut has been discussed as policymakers assess the risks of not taking action in the face of economic challenges.
Upcoming US data, including the July CPI release, will be crucial in determining the Fed’s decision on rate cuts. While inflation is expected to moderate slightly, it remains above the central bank’s target. Policymakers will need to consider the potential economic impact of maintaining current record-low rates.
XAU/USD Technical Analysis
Technically, XAU/USD is poised for further gains, with indicators pointing upwards on both daily and 4-hour charts. The pair is trading above key moving averages and has broken through a significant Fibonacci retracement level, indicating strong bullish momentum. While near-term overbought conditions exist, there are no clear signals of a reversal in the current uptrend.
Support Levels: $2,442.90, $2,438.80, $2,425.10
Resistance Levels: $2,466.00, $2,483.70, $2,495.10
Overall, Gold prices are expected to continue rising as Fed rate cut expectations grow. Investors should monitor upcoming US data releases for further insight into the Fed’s monetary policy decisions and potential impacts on the financial markets.