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Gold Price Forecast - XAU/USD regains upside momentum, following a pullback to year-to-date (YTD) highs, amid cautious optimism about the global banking sector. This information is summarized directly from the official website of fxstreet.com.
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Adding strength to the recovery move could be the market’s sluggishness to move amid the Japanese holiday, and the failure of US Treasury yields to extend their recent corrective bounce from a six-month low. Headlines suggesting US policymakers’ quest to ensure all bank deposits join the UBS-Credit Suisse deal and major central banks being urged to keep markets liquidated with US dollar flows seem to be supportive of gold buying. It is important to note, however, that the latest reading from the CME FedWatch said that the probability of seeing the Fed hike by 0.25% on Wednesday is near 75%, up from 65% last week, which in turn could allow US Treasuries to rebound. However, US yields remained muted due to the Japanese holiday that restricted bond trading in the Asian region. It is worth noting that the 10-year and 2-year US Treasury yields rebounded from their lowest levels since September 2022 a day earlier. Further, the Fed’s reaction to the banking crisis will be important for gold traders to watch as a 0.25% rate hike is already a given. If the policy pivot teases the dot-plot, then the US dollar has further downside to track, which in turn pushes the XAU/USD pair price.
Gold prices: levels to watch
As per the Technical Confluence Detector, gold prices traded successfully beyond the confluence support around $1,960, despite the lack of any fresh action, which in turn keeps the bullion buyers hopeful. Reportedly, the stated key support comprises 23.6% Fib one-week, previous monthly high and pivot point one-day S1. 23.6% Fib one-day and 50-HMA restrict the immediate downside near $1,965-66 in that order. It is worth mentioning that $1,940 acts as the major downside support apart from $1,960 that challenges the XAU/USD bears. Meanwhile, the previous weekly high around $1,990 could act as an immediate resistance ahead of highlighting the $2,000 threshold. If gold prices continue to hold strong past $2,000, then the one-day pivot point (R1) could act as a validation point for a further move higher towards $2,005 before pushing XAU/USD towards the 2022 peak of $2,070.
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This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.
