- Gold prices stabilized at the end of last week after a sharp rise in the previous session, as new US economic data eased recession fears, making the safe-haven metal less attractive to investors.
- According to gold trading platform data, the spot gold price remained relatively unchanged at $2435.66 per ounce, after recording its biggest daily gain in three weeks of 1.9% the previous day.
- Similarly, US gold futures rose by only 0.1% to trade at $2468.40 per ounce in New York.
During last week’s trading, gold prices remained down about 0.8%, on track for their biggest weekly decline since June 7. Moreover, the prices had fallen as much as 3% on Bloody Monday as part of a broader sell-off in the stock market, leading to a three-day losing streak. Gold prices rose on Thursday after new U.S. labor data showed jobless claims fell by the most in nearly a year, bolstering optimism that the Federal Reserve may be able to achieve a soft landing through monetary easing.
Also, Thursday’s gains put gold within striking distance of a record high it hit last month. The precious metal has gained about 18% this year, largely on expectations that the U.S. central bank will soon cut interest rates. Other factors supporting bullion’s bullion rally include increased purchases by central banks and Chinese consumers, as well as safe haven buying due to conflicts in the Middle East and Ukraine.
Regarding the outlook for gold, analysts at RBC Capital Markets said in a note to Bloomberg: "Increased volatility, elevated geopolitical risks, recession fears, and expected interest rate cuts have driven gold to current levels and eroded our conviction to urge caution" in buying bullion. Ole Hansen, head of commodity strategy at Saxo Bank, said in an interview with Reuters: "We maintain a positive outlook for gold as a diversified hedge against turmoil elsewhere."
“In the medium term, the outlook for gold remains positive, with any short-term declines likely to be driven by underlying macroeconomic factors,” said Zen Vawda, a market analyst at MarketPulse by OANDA. “Yesterday’s US jobless claims data eased recession fears, boosting gold prices. Additionally, comments from the Federal Reserve this week supported the idea that interest rate cuts could be imminent,” he added.
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Gold Price Forecast and Analysis Today:
At the end of last week’s trading, gold prices advanced to trade slightly above the 100-hour moving average. As a result, the yellow metal has moved to trade near the oversold levels of the 14-hour RSI. In the short term, based on the hourly chart, XAU/USD is trading within an ascending channel formation. Also, the 14-hour RSI supports the upside after advancing closer to overbought levels. Therefore, bulls will look to ride the current wave of gains towards $2,451 or higher to the $2,475/oz resistance. On the other hand, bears will look to pounce on pullbacks around $2,406 or lower at the $2,382/oz support.
In the long term, based on the performance on the daily chart, the XAU/USD pair is trading within an ascending channel formation. Recently, the 14-day RSI has bounced to confirm the bullish sentiment and is moving closer to overbought levels. Therefore, bulls will look to pounce on gains around $2,500 or higher at the $2,570/oz resistance. On the other hand, bears will target long-term gains around $2,362 or lower at the $2,288/oz support.
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