In recent days, the price of gold (XAUUSD) has been on a steady rise, reaching a new peak at 2460 USD per troy ounce. This upward trajectory can be attributed to a variety of factors, with one of the main drivers being the growing anticipation of a potential interest rate cut by the US Federal Reserve. Signals from the Fed’s July meeting, coupled with weaker-than-expected US economic data, have bolstered these expectations. The decline in US manufacturing activity and high unemployment claims indicate a possible economic softening, prompting speculations of a rate cut as early as September.
Additionally, escalating tensions in the Middle East have also contributed to the increased appeal of gold as a safe-haven asset. The uncertain geopolitical landscape has added another layer of support for the rising prices, as investors seek refuge in assets like gold during times of instability. This geopolitical factor, combined with the anticipation of an interest rate cut, has created a favorable environment for gold prices to continue their upward movement.
Looking at the technical analysis of XAU/USD, on the H4 chart, the market has shown a growth wave to the level of 2422.22. A consolidation range has formed around this level, with the potential for further growth towards 2474.50. After reaching this target, a correction to 2422.22 may occur before another wave of growth towards 2490.90. The MACD indicator supports this scenario, with its signal line trending upwards.
On the H1 chart, a consolidation range around 2446.00 has been formed, with a possible continuation of the wave to 2474.50 upon an upside exit. Correction to 2422.22 might follow, as indicated by the Stochastic oscillator preparing for a decline. Investors and traders should closely monitor these levels, considering the impact of the Fed’s decisions and geopolitical developments on the gold market’s future movements.
The surge in gold prices is driven by a combination of factors including expectations of an interest rate cut, weaker US economic data, geopolitical tensions, and technical indicators. While the current environment supports further price increases, market participants should remain vigilant about upcoming economic reports and geopolitical events that could influence the direction of the gold market in the near future.