Gold prices have been steadily climbing, reaching 2351.00 USD per troy ounce on Tuesday. This surge in gold prices can be attributed to a weakening US dollar and anticipation of crucial US inflation data set to be released later in the week. Investors are closely monitoring the situation, with the upcoming data likely to shed light on the Federal Reserve’s stance on interest rate adjustments.
The market is eagerly awaiting the release of the Core PCE indicator, scheduled for Friday, as it is expected to provide insights into the Fed’s potential interest rate decisions. The current sentiment leans towards a possible easing of the Fed’s stance, despite vague discussions on rate adjustments in recent meetings. This shift in market sentiment is reflected in the positive direction of short-term futures contracts on gold, indicating investor confidence in the precious metal.
Examining the H4 chart of XAU/USD, we see a second downward impulse towards the 2340.00 level, followed by a correction to 2358.50. A further decline to 2341.44 is anticipated, possibly leading to the formation of a consolidation range. A breakout from this range could signal a correction towards 2384.80 or a downward movement to 2318.80, supported by the MACD indicator’s downward trend.
On the H1 chart, a decline to 2325.40 was followed by a growth structure to 2342.31 and the formation of a consolidation range. A correction wave to 2358.50 may occur, with potential breakouts leading to either a decline to 2318.85 or a continuation of the correction to 2384.80. The Stochastic oscillator supports this scenario, indicating a possible downward trend with the signal line below 50.
The rise in gold prices is driven by a weaker US dollar and anticipations of key US inflation data. Technical indicators point to potential corrections and further declines, with significant support and resistance levels to monitor. Investors must remain vigilant and adapt their strategies accordingly to navigate the changing landscape of the gold market.