Gold Price Forecast: XAU/USD consolidates gains near fresh all-time highs

Valeria Bednarik FXStreet

XAU/USD Current price: $2,582.67

Investors await the Federal Reserve announcement and the first rate cut in four years.
Treasury bond yields fell towards fresh yearly lows, weighing on the US Dollar.
XAU/USD retreated modestly from record highs, retains its bullish potential.

Gold price reached a fresh record high of $2,589.50 a troy ounce on Monday, retreating just modestly from the level and now trading at around $2,582.00 in the American session. XAU/USD surged during Asian trading hours, helped by a resurgent Japanese Yen (JPY), which put pressure on the US Dollar against all major rivals.

The USD/JPY pair fell to its lowest in over a year as investors keep an eye on the interest rate difference between the United States (US) and Japan, as both central banks are meant to announce their monetary policies this week. The Federal Reserve (Fed) is widely anticipated to cut the benchmark interest rate by 25 basis points (bps) on Wednesday, while the Bank of Japan (BoJ) will likely move in the opposite direction on Friday. The US Dollar also fell in anticipation of the Fed’s announcement, as there is a chance the central bank will go for a larger rate cut.

Meanwhile, US Treasury yields trade near fresh multi-month lows. The 10-year note currently offers 3.63%, while the 2-year note yields 3.55%, its lowest in two years.

XAU/USD short-term technical outlook

The XAU/USD pair holds on to modest intraday gains, and technical readings in the daily chart show the risk skews to the upside, although the momentum receded. The pair finally detached from a bullish 20 Simple Moving Average (SMA), currently at around $2,517. The 100 and 100 SMAs gain upward traction far below the shorter one, reflecting persistent buying interest. Finally, technical indicators have turned flat, although they hold well into positive territory.

In the near term, and according to the 4-hour chart, XAU/USD seems poised to correct overbought conditions. Technical indicators are retreating from extreme levels with modest downward slopes, not enough to anticipate a steeper decline. Meanwhile, a firmly bullish 20 SMA heads firmly higher in the $2,550 region, far above the longer ones, which also advance.

Support levels: 2,575.20 2,563.60 2,550.00

Resistance levels: 2,590.00 2,605.00 2,620.00

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.