Gold (XAU) Daily Forecast: Uptrend Continues as Investors Eye Fed’s Next Move and Gold Hits $2,710

Market Overview

Gold prices (XAU/USD) continued their strong uptrend on Friday, reaching a fresh high near $2,710 per ounce, driven by expectations of interest rate cuts from major central banks. These rate cuts are heightening the appeal of gold as a safe-haven asset amid growing economic uncertainty and weakening currencies.

Central Bank Policies Fuel Gold Rally

Expectations of dovish moves from central banks have been a key driver behind the surge in gold prices. On Thursday, the European Central Bank (ECB) cut interest rates for the third time this year.

This marked its first consecutive cuts in over a decade, as the ECB battles a weakening economic outlook. Analysts predict more cuts are on the horizon. In the U.S., traders expect the Federal Reserve to continue its easing policy after its significant rate cut in September.

Positive U.S. macroeconomic data, including a 0.4% increase in September retail sales and lower-than-expected jobless claims of 241,000, bolstered the belief that the Fed will move cautiously, but steadily, toward additional cuts.

Dollar Weakens, Gold Gains Momentum

Adding further momentum to gold’s rally is the recent retreat in the U.S. Dollar. After hitting its highest level since August, the dollar has dipped, allowing gold to rise as the weaker greenback makes the metal more affordable for international buyers.

“With the U.S. Dollar pulling back, alongside expectations of a more accommodative stance from the Fed, gold is clearly benefiting from a bullish outlook,” said a senior commodities strategist.

Geopolitical Risks and Election Uncertainty Drive Safe-Haven Demand

While central bank policy plays a major role in gold’s upward trajectory, ongoing geopolitical tensions and uncertainty surrounding the U.S. presidential election are further boosting demand for the metal.

Investors are increasingly seeking gold as a hedge against volatility, as global risks remain heightened.

Gold’s current uptrend shows no immediate signs of reversal, as both monetary policy and global uncertainty continue to support its safe-haven appeal.

With interest rate cuts looming and economic conditions remaining fragile, gold is positioned to sustain its rally into the final quarter of 2024.

Short-Term Forecast

Gold prices are poised to continue rising if they remain above the key pivot point of $2,711.11, with immediate resistance levels at $2,722.87 and $2,733.65 in sight.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is continuing its upward momentum, currently priced at $2,709.24, up 0.61% in the last session. With strong technical indicators, the 50-day EMA stands at $2,662.10, while the 200-day EMA is at $2,608.29, suggesting a healthy long-term uptrend.

The pivot point at $2,711.11 is crucial—if gold stays above this level, it could open the door to higher resistance points at $2,722.87 and $2,733.65. A bullish engulfing candle on the 4-hour chart further signals buying opportunities.

However, if the price dips below the immediate support at $2,688.79, we may see a sharper selling trend develop. For now, the technicals favor a bullish outlook above $2,711.11.