Gold Forecast and News
Gold (XAU/USD) struggles to build on its intraday advance on Monday but holds modest gains as the US Dollar (USD) remains under selling pressure amid fading expectations that the Federal Reserve (Fed) will raise interest rates at its September meeting.
Technical Analysis
XAU/USD holds a constructive bullish bias as spot price hovers just above the 100-day Simple Moving Average (SMA) at $4,385. Momentum remains positive, with the Relative Strength Index (RSI) on the daily chart near 65 and the Moving Average Convergence Divergence (MACD) staying in positive territory, which together suggest that buyers retain control without pushing conditions into extreme overbought territory.
On the downside, immediate support is seen at the 100-day SMA around $4,385, with additional structural demand aligning lower at the horizontal level of $4,200 and the 50-day SMA near $4,147, ahead of a deeper floor at $4,000.
On the topside, the 200-day SMA at $4,506 is the next notable resistance, and a clear break above this longer-term average would likely open the door to a continuation of the recent uptrend.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Fundamental Analysis
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At the time of writing, XAU/USD trades near $4,401 after touching an intraday high of $4,416 during Asian trading hours.
According to the CME FedWatch tool, markets now see around a 70% chance that the US central bank will keep rates unchanged next month, up from 48% a week ago.
The change in expectations from a hike to a pause follows a run of disappointing US economic releases. Nonfarm Payrolls (NFP) fell in July, Retail Sales declined on a monthly basis, and both Consumer Price Index (CPI) and Producer Price Index (PPI) inflation slowed on an annual basis.
The soft data have pushed short-term US Treasury yields lower, but longer-dated yields remain close to recent highs. This has steepened the Treasury yield curve and created a difficult backdrop for the US Dollar.
Analysts at DBS Group Research caution that the traditional relationship between US rates and the currency is under strain, warning that “fading Fed-hike expectations, persistent US fiscal concerns, and elevated US long-term Treasury yields risk weakening the link between higher US yields and a stronger USD.” In their view, this leaves positioning increasingly precarious, with “speculators with large short USD positions…standing on fragile ground.”
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 99.45 after touching 99.30, its lowest level since June 5.
Gold retains a positive near-term bias, although buyers appear reluctant to push prices sharply higher. Market sentiment remains closely tied to developments in the Middle East, particularly the chances of reopening the Strait of Hormuz.
The 60-day memorandum of understanding signed by the United States and Iran in June expires on Monday without any agreement. The diplomatic stalemate keeps Oil prices elevated and the inflation outlook uncertain, which could force the Fed to keep borrowing costs higher for longer, a headwind for the non-yielding metal.
XAU/USD Forecast Poll
1 Week
- 0%
- Bullish
- 50%
- Bearish
- 50%
- Sideways
1 Month
- 40%
- Bullish
- 40%
- Bearish
- 20%
- Sideways
1 Quarter
- 34%
- Bullish
- 33%
- Bearish
- 33%
- Sideways
Gold (XAU/USD)
In the Forex market, Gold functions as a currency. The particularity of Gold is that it is traded against the United States Dollar (USD), with the internationally accepted code for gold being XAU.
Known as a safe-haven asset, Gold is expected to appreciate in periods of market volatility and economic uncertainty. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. The United States is the country that holds the biggest resources of Gold in the world.
The XAU/USD pair tells the trader how many US Dollars are needed to purchase one troy ounce of Gold.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold prices escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher borrowing costs usually weigh on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars. A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Organizations that influence XAU/USD
- WGC (World Gold Council) is the market development organization for the Gold industry. Its aim is to stimulate and sustain demand for the precious metal.
- LBMA (London Bullion Market Association) is an organization whose members participate in this wholesale over-the-counter market for trading Gold and Silver. It is loosely overseen by the Bank of England. Most LBMA members are major international banks, bullion dealers, and refiners.
- COMEX (Commodity Exchange) is the primary market for trading metals. The COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and joined the CME Group in 2008.
- CGSE (Chinese Gold and Silver Exchange Society) is an organization of Gold trading firms in Hong Kong that are participants of the Chinese Gold and Silver Exchange, the first exchange in Hong Kong.
- Central banks like the Federal Reserve (Fed), the European Central Bank (ECB) or the People's Bank of China (PBoC) significantly influence Gold prices through their monetary policies.
People that influence XAU/USD
- Neal Froneman, the World Gold Council's Chairman.
- Scott Bessent, the US Treasury Secretary.
- Xi Jinping, President of the People's Republic of China.
- The London Bullion Market Association members.
Circumstances that influence XAU/USD
The main variables traders should monitor to understand Gold's position are:
- Demand and supply: The balance between global Gold demand and its availability impacts its price.
- Economic uncertainty and currency devaluation: Gold is widely known as a safe-haven asset for investors in periods of economic uncertainty or when a currency faces devaluation.
- Practical applications: The use of Gold in technology innovations, jewelry manufacturing and other industrial applications.
Assets that influence XAU/USD
- Currencies: The US Dollar (USD) and the Euro (EUR) are the primary currencies influencing Gold prices. Other important currency pairs include EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD, and USD/CAD.
- Commodities: Silver and Gold are the most important precious metal commodities.
- Bonds: Influential fixed-income securities include the German Bund (a federal government-issued bond) and the US Treasury Note (T-Note).
- Indices: Key indices related to Gold and mining include the HUI (NYSE Arca Gold BUGS), the XAU (Philadelphia Gold and Silver Index) and the GDM (NYSE Arca Gold Miners Index).
- Exchanges: The most important stock exchanges for Gold are the New York Mercantile Exchange (COMEX), the Chicago Board of Trade, the Euronext/LIFFE, the London Bullion Market, the Tokyo Commodity Exchange, the Bolsa der Mercadorias e Futuros and the Korea Futures Exchange.