XAUUSD is ready to reach $2500 before the crash!
Current Overview
Gold (XAU/USD) has regained traction, trading in positive territory slightly above $2,420 after dipping towards $2,400 at the beginning of the week.
Technical Analysis
Daily Chart: The bullish outlook for XAU/USD remains strong despite a retreat from intraday highs. The daily chart shows that the pair is rallying well above bullish moving averages. Technical indicators are gaining upward momentum and approaching overbought readings, with no signs of reversal.
4-Hour Chart: In the near term, XAU/USD might face challenges in extending its gains. Technical indicators are retreating from overbought readings with uneven strength but remain above the bullish 20-period Simple Moving Average (SMA) around $2,400.
Key Levels
Resistance Levels:
Immediate resistance is at the recent high of $2,439.
If XAU/USD surpasses this level, it could test the year-to-date high of $2,450.
Further gains could target the $2,500 level.
Support Levels:
Initial support is at $2,400.
Market Sentiment
US Dollar Dynamics: Demand for the US Dollar initially increased following the weekend news of an assassination attempt on former President Donald Trump. However, the Greenback quickly lost ground as investors speculated that a potential Trump election win might lead to looser fiscal policies.
Fed Policy Outlook: Moody’s Credit Rating Agency predicts that the Federal Reserve could start easing monetary policy as early as this month, with potential rate cuts of 50-75 basis points in 2024 and an additional 100-125 basis points by 2025. This dovish outlook has bolstered gold prices, as lower rates make non-interest-bearing assets like gold more attractive.
Economic Data:
US Consumer Price Index (CPI) data came in weaker than expected, increasing the likelihood of a Fed rate cut, as reflected by falling US Treasury bond yields.
The University of Michigan's Consumer Sentiment Index dropped to a seven-month low of 66.0 in July, missing expectations, which further supports the case for rate cuts.
Additional Influences
Global Factors: The People's Bank of China (PBoC) decided to halt gold purchases in June, as it did in May. By the end of June, China held 72.80 million troy ounces of gold.
Gold (XAU/USD) has regained traction, trading in positive territory slightly above $2,420 after dipping towards $2,400 at the beginning of the week.
Technical Analysis
Daily Chart: The bullish outlook for XAU/USD remains strong despite a retreat from intraday highs. The daily chart shows that the pair is rallying well above bullish moving averages. Technical indicators are gaining upward momentum and approaching overbought readings, with no signs of reversal.
4-Hour Chart: In the near term, XAU/USD might face challenges in extending its gains. Technical indicators are retreating from overbought readings with uneven strength but remain above the bullish 20-period Simple Moving Average (SMA) around $2,400.
Key Levels
Resistance Levels:
Immediate resistance is at the recent high of $2,439.
If XAU/USD surpasses this level, it could test the year-to-date high of $2,450.
Further gains could target the $2,500 level.
Support Levels:
Initial support is at $2,400.
Market Sentiment
US Dollar Dynamics: Demand for the US Dollar initially increased following the weekend news of an assassination attempt on former President Donald Trump. However, the Greenback quickly lost ground as investors speculated that a potential Trump election win might lead to looser fiscal policies.
Fed Policy Outlook: Moody’s Credit Rating Agency predicts that the Federal Reserve could start easing monetary policy as early as this month, with potential rate cuts of 50-75 basis points in 2024 and an additional 100-125 basis points by 2025. This dovish outlook has bolstered gold prices, as lower rates make non-interest-bearing assets like gold more attractive.
Economic Data:
US Consumer Price Index (CPI) data came in weaker than expected, increasing the likelihood of a Fed rate cut, as reflected by falling US Treasury bond yields.
The University of Michigan's Consumer Sentiment Index dropped to a seven-month low of 66.0 in July, missing expectations, which further supports the case for rate cuts.
Additional Influences
Global Factors: The People's Bank of China (PBoC) decided to halt gold purchases in June, as it did in May. By the end of June, China held 72.80 million troy ounces of gold.
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