Gold Price Forecast: XAU/USD holds below $2,350, geopolitical risks remain in focus

Gold price trades softer around $2,325 in Monday’s early Asian session.
The US PCE price index was not sufficient to prompt the Federal Reserve (Fed) rate cut, weighing on the yellow metal.
Israeli Prime Minister begrudgingly accepted the US President's plan for a ceasefire in Gaza on Sunday.

Lallalit Srijandorn FXStreet

Gold price (XAU/USD) edges lower to $2,325 on Monday during the early Asian trading hours. The yellow metal trims gains after the US Personal Consumption Expenditure (PCE) data for April showed price pressures cooled in April. Meanwhile, the ongoing Middle East geopolitical risks might provide some support to gold, traditional safe-haven assets.

The recent US PCE inflation report was not sufficient to prompt a Federal Reserve (Fed) rate cut, and the central bank might need some time to achieve its goal. Investors initially anticipated the first rate cut to come in March, but it got pushed to September. This, in turn, weighs on the precious metal as it increases the opportunity cost of holding the non-yielding asset.

The US PCE price index rose 0.3% MoM in April, while the annual PCE figure increased 2.7% YoY. Both figures came in as expected, according to the Commerce Department, on Friday. Meanwhile, the Core PCE, excluding volatile food and energy, advanced 0.2% MoM in April as compared to a 0.3% gain in March. On an annual basis, the core PCE price index climbed 2.8% for the third consecutive month.

On Sunday, Israeli Prime Minister Benjamin Netanyahu's administration reluctantly agreed to President Biden's proposal for a Gaza cease-fire. The negotiations take place as the attack in Rafah continues after intensive Israeli airstrikes over the weekend, per the BBC. Investors will monitor the developments surrounding the geopolitical tensions. Any signs of escalating risks could boost safe-haven flows, benefiting the gold price.

XAU/USD

Overview
Today last price	2325.17
Today Daily Change	-2.17
Today Daily Change %	-0.09
Today daily open	2327.34

Trends
Daily SMA20	2356.94
Daily SMA50	2327.22
Daily SMA100	2196.2
Daily SMA200	2081.98

Levels
Previous Daily High	2359.75
Previous Daily Low	2320.65
Previous Weekly High	2364.15
Previous Weekly Low	2320.65
Previous Monthly High	2450.1
Previous Monthly Low	2277.31
Daily Fibonacci 38.2%	2335.59
Daily Fibonacci 61.8%	2344.81
Daily Pivot Point S1	2312.08
Daily Pivot Point S2	2296.81
Daily Pivot Point S3	2272.98
Daily Pivot Point R1	2351.18
Daily Pivot Point R2	2375.01
Daily Pivot Point R3	2390.28

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.