Gold prices experienced a 0.30% increase on Tuesday, driven by a decline in US Treasury yields and a weakening US dollar. Traders are eagerly awaiting important US inflation data, as well as the first presidential debate between Kamala Harris and Donald Trump. These events have the potential to significantly impact the market’s overall sentiment.
Current Trading Situation
Gold (XAUUSD) is currently valued at $2,514, showing signs of recovery from a recent low of $2,500. Market analysts are predicting a high probability of a Federal Reserve interest rate cut, with a 67% chance of a 25 basis point reduction and a 33% likelihood of a 50 basis point cut. Although recent US job data indicated a lower than expected number of new jobs, the slight decline in the unemployment rate has offered some relief to the Fed.
Examining the H4 timeframe for XAUUSD, the price of gold exhibited a bounce from trendline support due to the convergence of the daily timeframe pivot and hidden divergence on the stochastic indicator. However, the current price action suggests a potential reversal as it hovers around another daily timeframe pivot. This could present an opportunity for bearish traders to enter the market, particularly upon a break-and-retest of the trendline support.
On the H1 timeframe, price movements appear to be following a SBR (Support-Buffer-Resistance) pattern, indicating a possible bearish trend. Confirmation of this pattern is anticipated after a rejection from the supply zone above the inducement level. Overall, the sentiment towards gold remains bearish according to market analysts.
The prevailing expectation among analysts is a bearish direction for gold prices, with a target price of $2,495.75. Any price movement beyond $2,530.15 would invalidate this prediction, signaling a potential shift in market dynamics. Traders are advised to closely monitor key levels and indicators to capitalize on market opportunities amidst uncertainties.