Gold Price Forecast: XAU/USD Strives for Direction Amid Deepening Uncertainty Over Fed Rate Cuts

In simple terms, on Wednesday during the London session, the price of gold, also known as XAU/USD, is having a tough time finding a clear direction. It’s staying within a narrow range just above a key support level of $2,300.

Despite the US Dollar making a strong comeback, with the US Dollar Index (which measures its value against other major currencies) rising to 105.50, gold is only slightly up by 0.10%. Normally, when the US Dollar gains strength, it makes gold less appealing because gold is priced in dollars.

The reason for the dollar’s rebound is partly because of comments from Neel Kashkari, who is the president of the Minneapolis Federal Reserve Bank. He hinted that the Fed might take a more cautious approach on cutting interest rates. This made investors more interested in the dollar, which affected gold prices.

In simple terms, Neel Kashkari, who works at the Federal Reserve Bank, said he wants to see inflation go up consistently for a while before the Fed considers changing its policies. He thinks this will help make sure inflation gets back to the level the Fed wants, which is 2%.

Kashkari also thinks it’s a good idea to keep interest rates the same for the whole year because the housing market is doing really well, and that’s slowing down the process of inflation going down.

Meanwhile, the tension between Israel and Palestine is still ongoing, which is helping to keep the price of gold up. Israel is planning to expand its military activities into a part of Gaza called Rafah, where they believe displaced Palestinians are staying.

There was hope for a ceasefire between Israel and Palestine, but it’s not looking likely because Israel said no to the ceasefire proposal that Palestine agreed to. When there’s uncertainty and tension like this in the world, people tend to invest in safe things like gold, which keeps its price high.

Gold Technical Analysis

The price of gold has been staying within a certain range between $2,280 and $2,330 for over a week now. This shows that people trading gold aren’t sure which way it’s going to go.

Gold seems to be sticking close to the 20-period Exponential Moving Average (EMA), which is around $2,314.60. This usually means that the price might keep moving sideways for a while, without going up or down much.

The 14-period Relative Strength Index (RSI), which measures how quickly the price is changing, is bouncing between 40.00 and 60.00. This tells us that the price isn’t changing very quickly, which could mean things are calming down after a period of high volatility.

Gold Four-Hour Chart Analysis

XAU/USD Analysis

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