The gold price forecast is showing signs of hesitation, with prices falling slightly below the $2,360 level, after a three-day rebound. This pause comes amid rising tensions in the Middle East and increased gold demand from India. However, the strengthening US Dollar presents a challenge for gold prices.
Gold Price Stability and Market Sentiment
On Tuesday, the US Dollar gained traction as risk sentiment deteriorated due to heightened Middle Eastern tensions. Additionally, hawkish remarks from Neel Kashkari, President of the Minneapolis Federal Reserve, and rising US Treasury yields supported the dollar, lifting it from recent lows.
A tragic incident involving Israeli forces targeting a tent camp west of Rafah, resulting in significant casualties, further heightened geopolitical tensions. In response, the UN Security Council held an emergency meeting, and several nations, including Spain, Ireland, and Norway, recognized Palestine. Despite these events, the gold market saw diminished appeal as investors flocked to the US dollar.
Despite these factors, short-term gold price forecast declines seem limited. Optimism persists about China’s economic recovery, bolstered by the IMF’s upward revision of China’s 2024 GDP forecast to 5%. Additionally, escalating geopolitical tensions could boost gold demand as a safe-haven asset. Recent reports from the World Gold Council (WGC) indicate strong gold buying in both urban and rural areas for festivals.
Key Data Releases and Federal Reserve Speeches
There are no major economic indicators scheduled from the United States in the near term. Instead, attention will shift to speeches by Federal Reserve officials. Fed policymakers Williams and Bostic are set to speak later in the North American session, and the Fed’s Beige Book will also be published, potentially influencing market sentiment.
Technical Analysis
The gold market outlook for gold remains positive, with buyers targeting validation above the former support of the ascending wedge, now acting as resistance at $2,372. The gold price’s bullish momentum is evident, with the 14-day Relative Strength Index (RSI) holding above 50, currently at 52.60.
Gold’s recent close above the 21-day Simple Moving Average (SMA) resistance at $2,353 supports the upward trend. A sustained move above the $2,372 resistance level would reinforce the ongoing recovery and could lead to testing the next resistance at $2,384.
Looking ahead, gold’s potential move towards $2,400 seems likely. Immediate support is now at the 21-day SMA level of $2,353. If selling pressure increases, gold bears would need to breach the 50-day SMA support at $2,323 to drive prices toward $2,300.
Conclusion
In summary, while gold prices are experiencing some setbacks, the overall bullish outlook remains intact. For further updates on gold prices and market outlook, visit Daily Gold Signal and explore the latest daily gold updates.
