Gold Price Update: XAU/USD Reaches All-time High at $2,531.60 Amid USD Weakness

  • Market Optimism Fades Ahead of FOMC Minutes Release
  • China Emerges as Major Gold Buyer on Speculation of Weaker USD
  • XAU/USD Corrective Decline Possible, But Bullish Sentiment Prevails

Gold prices surged to a record high of $2,531.60 on Tuesday, fueled by a weakening US Dollar and increased demand for the safe-haven metal, particularly from China. Expectations of a potential interest rate cut by the Federal Reserve have led to speculation of further USD depreciation, prompting Chinese investors to flock to gold. However, profit-taking in the US session has caused XAU/USD to retreat towards the $2,500 level.

Despite the reversal in equities and slight losses in US markets, overall market sentiment remains positive, keeping the US Dollar under pressure despite the intraday decline in XAU/USD.

Focus now shifts to the release of the FOMC Minutes on Wednesday, which could provide insight into the Fed’s future monetary policy decisions. However, market consensus already expects a rate cut in September, limiting the potential impact of the Minutes on the USD.

Technical Analysis of XAU/USD

The daily chart indicates that XAU/USD has room for further gains, with the recent pullback considered a corrective move. The pair remains well above its moving averages, signaling a bullish trend. While the Momentum indicator has retreated slightly, the RSI remains stable around 65, suggesting limited downside potential.

On the 4-hour chart, technical indicators show that the ongoing retracement is not indicative of a major decline. Moving averages continue to slope upwards, with support levels at $2,496.40, $2,485.10, and $2,427.20, and resistance levels at $2,510.00, $2,523.50, and $2,535.00.

Overall, XAU/USD remains in a bullish trend, supported by weakening USD and strong demand for gold as a safe-haven asset.

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