Gold (XAU) Daily Forecast: Eyes on $2333 Pivot as Dollar Weakens

Arslan Ali
Published: Apr 24, 2024, 06:46 GMT+00:00

Key Points:

  • Gold remains bullish above $2300, key pivot at $2333.85 may fuel further gains.
  • U.S. dollar's decline supports gold; PMI data weakens expectations for rate hikes.
  • Upcoming U.S. economic reports will likely influence gold’s interest rate sensitivity.
Gold (XAU) Daily Forecast: Eyes on $2333 Pivot as Dollar Weakens

In this article:

Market Overview

Gold (XAU/USD) prices fluctuated narrowly in Wednesday’s Asian trading session as the yellow metal found some support from a weakened U.S. dollar. Despite this, the uncertainty surrounding future interest rate decisions continued to leave investors cautious.

Impact of Dollar on Gold Prices

The U.S. dollar experienced a decline following the release of weaker-than-expected Purchasing Managers’ Index data for April.

This decrease in the dollar’s strength helped curb the recent fall in gold prices, as gold and other metals are often priced in dollars.

However, the dollar maintained most of its gains from earlier in the month, reflecting market adjustments to diminished expectations for imminent Federal Reserve rate cuts.

Rate Outlook and Safe-Haven Demand

Initial safe-haven demand, spurred by geopolitical tensions between Iran and Israel, had previously propelled gold prices higher.

However, with tensions not escalating further, gold became more exposed to the pressures of potentially prolonged high interest rates.

High interest rates generally negatively impact gold as they raise the opportunity cost of holding non-yielding bullion.

Precious Metals and Economic Indicators

Other precious metals also saw some uplift against the backdrop of a weaker dollar, although they too were recovering from recent significant losses. For instance, platinum futures increased by 0.4% to $924.50 an ounce, and silver futures gained 0.5% to $27.485 an ounce.

The market’s attention is increasingly focused on forthcoming U.S. economic reports, which will provide further insights into interest rate trajectories.

Key data releases include the first-quarter Gross Domestic Product on Thursday and the Personal Consumption Expenditures Price Index, the Fed’s favored inflation measure, on Friday.

Recent data indicating persistent U.S. inflation has led to market adjustments, with fewer traders now anticipating a rate cut as early as June.

Upcoming Economic Events:

  • 12:30 USD Core Durable Goods Orders m/m: Forecast 0.3%, Previous 0.3%
  • 12:30 USD Durable Goods Orders m/m: Forecast 2.5%, Previous 1.3%

Gold Prices Forecast

Gold - Chart
Gold – Chart

Today’s session saw gold inch up by 0.17% to $2324.80, with the market evaluating key technical indicators and price levels. The pivot point stands at $2333.85, a crucial juncture that could determine the metal’s immediate directional bias.

Gold faces immediate resistance at $2370.56, with further resistance markers at $2418.45 and $2463.94. Conversely, support levels are established at $2278.78, followed by $2227.70 and $2183.01, providing potential floors where buying could reemerge.

The 50-Day Exponential Moving Average (EMA) at $2348.10 suggests a potential resistance zone, while the 200-Day EMA at $2266.29 supports the longer-term uptrend. The proximity of the current price to these averages underscores a cautious market sentiment.

The outlook for gold remains bullish above the $2300 mark, a psychological and technical support level. A breach below this threshold may trigger a sharp downtrend towards the next support level at $2278.78. Conversely, maintaining above $2333.85 could fuel further upward momentum.

About the Author

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.

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