Gold Price Forecast: XAU/USD flirting with $3,400, record highs in sight

XAU/USD Current price: $3,396.35

• Tensions between US President Trump and the Federal Reserve weigh on markets.
• The United States will release relevant macroeconomic data ahead of the weekend.
• XAU/USD aims to recover past $3,400 and could soon retest record highs.

Spot Gold continued to consolidate gains throughout the first half of Wednesday, accelerating north after Wall Street’s opening amid broad US Dollar (USD) weakness. The XAU/USD pair trades near the $3,400 mark, and at its highest in two weeks.

The Greenback found some footing during Asian and European trading hours amid mounting tensions between the United States (US) President Donald Trump and the Federal Reserve (Fed). Trump is determined to seize control of the central bank by changing Board members and forcing policymakers to lower the benchmark interest rate at a faster pace.

However, the USD changed course in the last session of the day, now trading firmly lower across the FX board.

Markets' attention will remain on US political tensions and trade-war-related headlines. During the upcoming days, the US will publish some relevant figures, starting with the second estimate of the Q2 Gross Domestic Product on Thursday, and finishing with the Personal Consumption Expenditures (PCE) Price Index on Friday. The latter is the Fed’s favorite inflation gauge, and may impact the market’s sentiment towards a September rate cut.

XAU/USD short-term technical outlook

From a technical point of view, the daily chart shows that the XAU/USD pair advances above all its moving averages, with the 20 Simple Moving Average (SMA) slowly grinding higher at around $3,357.20. The 100 and 200 SMAs maintain their upward slopes below the shorter one, in line with the dominant bullish trend. Finally, and given that the fresh weekly peak barely surpasses the previous one, technical indicators lack momentum, offering modest upward slopes within positive levels.

The near-term picture reflects increased buying interest. In the 4-hour chart, the XAU/USD pair met intraday buyers at around a bullish 20 SMA, which keeps advancing above directionless 100 and 200 SMAs. Technical indicators, in the meantime, recovered from their midlines and finally stabilized well above their midlines.

Support levels: 3,380.45 3,368.20 3,350.50

Resistance levels: 3,405.80 3,421.10 3,433.90