Gold Prices Surge to New Record Highs
Gold prices surged to $2,570 per troy ounce on Friday, reaching new record highs. This significant increase became possible amidst the weakening position of the US dollar and declining yields on US government bonds.
Factors Driving Gold Prices Upward
- The release of US macroeconomic statistics indicating a weakening employment market.
- Weak wage figures for August.
- Increasing maintenance costs.
- Easing inflationary pressures, allowing the Federal Reserve to consider lowering interest rates.
Market Expectations
According to the CME FedWatch tool, there is a 59% chance of a 25-basis-point interest rate cut and a 41% chance of a 50-basis-point rate cut. The recent interest rate cut by 60 basis points to 3.65% per annum is a positive signal for gold prices.
XAU/USD Technical Analysis
On the XAU/USD H4 chart, the market has broken above the consolidation range, suggesting a potential growth wave to $2,570. A technical decline to $2,541.55 could follow before another upward movement towards $2,585.85.
Breaking through the $2,535.35 level may lead to continuous growth to $2,595.95 without significant correction. The MACD indicator supports this scenario, indicating upward momentum.
On the XAU/USD H1 chart, a consolidation range is forming below $2,570. A downward breakout could lead to a decline to $2,541.55, while an upward breakout could continue the trend towards $2,585.85. The Stochastic oscillator also supports this scenario.
By RoboForex Analytical Department
Disclaimer
Any forecasts in this analysis are based on the author’s opinion and should not be considered trading advice. RoboForex is not responsible for trading results based on this information.
Analysis:
In summary, gold prices have reached new highs due to a combination of factors, including weakening employment data, rising maintenance costs, and expectations of a potential interest rate cut by the Federal Reserve. Technical analysis suggests further growth potential for gold prices, supported by indicators like the MACD and Stochastic oscillator.
For investors, this indicates a bullish trend in the gold market, presenting opportunities for potential profits. It also highlights the importance of monitoring macroeconomic factors and central bank policies when making investment decisions, as they can significantly impact asset prices and market trends.