Gold price movements and factors (XAU/USD) are showing some positive movement this Thursday, recovering from a four-day decline. Despite this, prices remain below the $2,400 mark as the European session begins. Caution is warranted as bullish momentum is not yet strong, but the overall outlook for gold appears favorable.
2. Economic and Geopolitical Influences
Concerns and Impacts on Gold Prices
Investors are worried about a potential economic slowdown in China and a possible recession in the US. Geopolitical tensions in the Middle East add further pressure, likely benefiting gold price movements and factors. Additionally, anticipated Federal Reserve (Fed) rate cuts are weakening the US Dollar (USD), boosting gold’s appeal.
Daily Digest: Market Movements and Gold Price Support
This week’s gains in global equity markets are stalling due to recession concerns, which supports gold prices as a safe-haven asset. Tensions are high following an Iranian attack and the Israeli response, potentially leading to wider conflict in the Middle East.
Investors are expecting a 25-basis points Fed rate cut impact from the Fed in September, with some speculating a 50-bps cut due to fears of an economic downturn. This expectation has led to a decline in US Treasury bond yields and capped the USD’s recent recovery. This environment supports the bullish outlook for gold.
Technical Analysis
Gold Price Resistance and Support Levels
Technically, gold price movements need to surpass the $2,400 level to face potential resistance near the $2,410-2,412 zone. A sustained rise could lead to a rally, pushing prices to $2,430 and potentially $2,448-2,450. Continued buying could aim for a retest of the July peak around $2,483-2,484, and clearing $2,500 might set up further gains.
Conversely, if gold prices drop, support is expected near the 50-day SMA around $2,368. A further decline could lead to a test of last week’s low at $2,353-2,352, followed by $2,344 or the 100-day SMA. Additional selling could push prices towards $2,300.
Conclusion
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