Gold prices have skyrocketed to $2500/oz after a much-anticipated retracement during Thursday’s US session. The surge comes amidst a stronger market, rising US Yields, and potential profit-taking ahead of Fed Chair Powell’s speech at the Jackson Hole Symposium.
Investors are eagerly awaiting Powell’s remarks, with many expecting confirmation of September rate cuts. However, recent downward revisions to US jobs data have led many to believe that a rate cut in September is already a certainty. This raises the question of how the market will react to Powell’s speech.
Despite the weakness in the US Dollar and the rise in Gold last week, it appears that expectations of a September rate cut may already be factored into the market. The struggles of Gold in the US session following Fed policymakers’ confirmation of rate cuts hint at this possibility.
Looking ahead to Powell’s speech, there may still be volatility in the market due to other Federal Reserve policymakers speaking today. However, the overall direction may not see significant changes. Attention will be focused on any mentions of a potential 50 bps cut in September, as futures currently price in nearly 100 bps of cuts by the end of 2024.
Technical Analysis Gold (XAU/USD)
From a technical perspective, Gold’s rebound in the European session has been strong, pushing the precious metal above $2500/oz. Yesterday’s dip likely allowed bulls to reload and new investors to enter at a better price, leading to the rapid recovery.
Immediate resistance levels in today’s US session are seen at 2514 and 2531.66, with support levels at 2484 and 2472. A move lower could retest the key support level at 2450.
GOLD (XAU/USD) Weekly Chart, August 23, 2024
Source: TradingView
Support: 2484, 2472, 2450
Resistance: 2514, 2531.66
Analysis: Gold prices have surged to $2500/oz ahead of Powell’s speech, with expectations of a September rate cut already factored in. Investors should pay close attention to Powell’s remarks for any hints of a potential 50 bps cut. The technical analysis suggests strong bullish momentum, with key support and resistance levels identified for trading decisions.