Gold Price Forecast: XAU/USD awaits Fed minutes well-positioned to break above $1800

FXStreet Insights Team FXStreet

Heading into the Fed’s July meeting’s minutes release, gold is witnessing a buying resurgence, as the bulls look to reclaim the $1800 mark. In the view of FXStreet’s Dhwani Mehta, the yellow metal is set to breakout to the upside.

See – Gold Price Forecast: XAU/USD to face tough resistance at $1800 – OCBC

$1800 testing bullish commitments, Fed minutes hold the key

“The FOMC minutes will throw fresh light on the US central bank’s tapering plans. Escalating covid concerns continue to remain an upside risk for gold price, as they bring along a lot of uncertainty on the prospects of global economic recovery.”

“The dollar is easing ahead of the key event risk amid a minor recovery in the risk sentiment, which has fuelled the gains in gold price (for now). If the risk aversion seeps back in the sessions ahead, the safe-haven dollar could catch a fresh bid and dent’s gold’s bullish potential.”

“The horizontal 200-SMA at $1796 appears a tough nut to crack for gold bulls while the immediate downside remains capped by the horizontal 100-SMA at $1786. The Fed minutes could yield a breakout in either direction. However, with the Relative Strength Index (RSI) edging higher above the midline, the risks remain skewed towards an upside breakout.”

“The 200-Daily Moving Average (DMA) at $1813 could be next on the buyers’ radar. Therefore, a four-hourly closing above the 200-SMA could call for a test of the $1800 mark.”

“Any dip below the 100-SMA could expose the bullish 21-SMA at $1780, below which the last line of defense appears at the downward-sloping 100-SMA at $1759.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

Gold remains below $4,100 despite receding Fed hike bets, weak USD

Gold opens with a bullish gap at the start of a new week amid receding Fed rate-hike expectations and a bearish US Dollar. Oil prices tumbled after Trump canceled an attack on Iran and said that a deal is near, easing inflation fears. This forces traders to dial back bets on extreme Fed tightening and drags the USD to a fresh low since June 17, which, in turn, is supporting the non-yielding bullion. However, the recent repeated failures to find acceptance above $4,100 warrant caution for XAU/USD bulls.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Middle East War updates: Trump holds off Iran strikes on pledge Hormuz deal is close

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. Risk sentiment improves on Monday, undermining demand for the US Dollar Index and drag crude oil prices lower.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.