Gold (XAU) Daily Forecast: Will Bullish Momentum Hold Above $2,660?

Market Overview

Gold prices (XAU/USD) climbed for the second straight day on Wednesday, reaching a one-and-a-half-week high of $2,670.

The safe-haven asset is benefiting from a risk-off sentiment fueled by heightened geopolitical tensions in the Middle East.

However, a steady U.S. dollar and evolving Federal Reserve expectations are keeping a lid on further price gains.

Fed Rate Expectations Curb Gold’s Upside Potential

The U.S. dollar, which hit a two-month high last week, has since consolidated its gains, offering little to drive gold prices higher. With the Federal Reserve expected to enact a measured 25 basis point rate cut in November, there is little room for a significant USD decline.

“The Fed’s cautious approach to monetary easing will likely limit any substantial gold rally,” analysts noted.

U.S. Treasury yields fell for the second day in response to weaker-than-expected economic data. The Empire State Manufacturing Index dropped to -11.9 in October, the lowest reading since May, highlighting a downturn in U.S. manufacturing.

Falling yields have bolstered gold, as the metal’s non-yielding nature makes it more attractive in a low-rate environment.

Geopolitical Tensions Fuel Safe-Haven Demand

Ongoing geopolitical tensions in the Middle East continue to boost demand for gold. Conflicts in the region have elevated risk across markets, with investors turning to safe-haven assets for protection.

These developments are expected to sustain gold’s upward momentum in the near term.

In summary, gold prices remain supported by a combination of falling Treasury yields and rising geopolitical risks, while expectations of steady Fed policies could cap significant price increases.

Short-Term Forecast

Gold prices may continue upward as geopolitical tensions persist. However, resistance at $2,676.15 could limit gains, while a break below $2,660 risks a potential sell-off.

Gold Prices Forecast: Technical Analysis

Gold (XAU/USD) is trading at $2,666, up 0.18%, as it hovers just below the key pivot point of $2,658.98 on the 4-hour chart. Immediate resistance is at $2,676.15, with further resistance levels at $2,685.60 and $2,695.44.

Support lies at $2,646.10, and should prices break below that, we could see a dip toward $2,635.33 or even $2,624.38. The 50-day EMA is sitting at $2,649.20, while the 200-day EMA is lower at $2,632.32, suggesting bullish momentum for now.

Gold looks strong above $2,660, but a break below this level could trigger a sharper sell-off.