Gold Forecast and News
Gold treads water below $4,300
Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.
Latest XAU/USD News
XAU/USD Technical Overview
XAU/USD trades at $4,290, but momentum indicators on the 4-hour chart remain neutral-to-bearish, which highlights the fragility of the current recovery attempt. The Relative Strength Index (14) hovers just below the 50 midline and the Moving Average Convergence Divergence (MACD) indicator edges toward the zero line.
Bulls remain capped below $4,300 so far, but the initial resistance emerges at the horizontal barrier of $4,400 area, which has held bulls several times this week. A confirmation above those levels would ease negative pressure and shift the focus towards the early-September highs, just above $4,5000.
On the downside, the $4,230 area (August 6, September 16 lows) is a key support. If that level gives way, previous resistances in the $4,100-$4,150 area are likely to be targeted ahead of the late July and early August lows, just above the $4,000 psychological level.
Fundamental Overview
Fed speakers have reinforced the hawkish view this week, the latest examples being Philadelphia Fed President Anna Paulson, who said that the bank will have to apply “modest” rate increases to bring inflation to target, and New York Fed President John Williams, who stated on Thursday that “it is reasonable to see another US rate hike this year.”
Beyond that, US Treasury yields remain at high levels, with the 10- and 30-year notes paying above 5%, at 19- and 22-year highs respectively.
Looking ahead, OCBC strategists underline that “oil and the rates response remain the main swing factors” for gold in the near term. They suggest that “some easing in energy prices or the USD could help gold stabilise,” whereas “a further rise in yields would keep the near-term bias under pressure,” reinforcing the view that the metal’s trajectory will be closely tied to moves in commodity markets and bond yields.
SPECIAL WEEKLY FORECAST
Interested in weekly XAU/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the gold-dollar pair. Here you can find the most recent forecast by our market experts:
Gold: Bulls can’t catch a break as Fed doubles down on hawkish rhetoric
Latest XAU/USD Analysis
Editors' picks
EUR/USD reclaims 1.1400 amid USD correction
EUR/USD leaves behind four consecutive days of losses, managing to regain some composure and revisit the 1.1400 region at the end of the week. Indeed, the pair’s decent bounce follows the daily correction in the US Dollar, which appears accompanied by a daily drop in crude oil prices and a modest pullback in US Treasury yields across the curve.
GBP/USD meets support around 1.3200
GBP/USD trades with decent gains, bouncing off recent lows in the vicinity of the 1.3200 support and retesting the 1.3250 zone on Friday. Cable thus sets aside a multi-day negative streak, picking up some upside traction in response to daily losses in the Greenback.
USD/JPY pulls back from three-week high after failing near 159.00
USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.
Gold treads water below $4,300
Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.
WTI futures breach below $90.00, three-week lows
Front-month WTI prices remain under pressure on Tuesday, breaking below the key $90.00 mark per barrel to reach fresh three-week troughs. In the meantime, prices decline for the fourth day in a row on the back of hopes of a diplomatic solution to the US-Iran-Hormuz conflict.
Majors
Cryptocurrencies
Signatures
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.