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Gold (XAU) Daily Forecast: Price Peaks at $2417 Amid Mid-East Tensions

By:
Arslan Ali
Published: Apr 19, 2024, 06:40 GMT+00:00

Key Points:

  • Gold XAU/USD surges to $2417 amid military strikes in Iran but later drops.
  • Fed's decision to maintain interest rates influences gold's non-yielding status.
  • China's consistent gold reserve accumulation supports higher market prices.
Gold (XAU) Daily Forecast: Price Peaks at $2417 Amid Mid-East Tensions

In this article:

Market Overview

The Gold XAU/USD price has seen an uptick, rising to new heights $2417 on Friday amid escalating geopolitical tensions, however, gold couldn’t sustain it’s bullish trend and reversed back to trade near $2380. Reports of military engagements in Iran, coupled with Israel’s recent retaliatory strikes, have bolstered gold’s status as a safe-haven asset, driving prices upward as investors seek stability.

The XAU/USD price surge is notably influenced by these ongoing conflicts in the Middle East, which continue to stoke fears of a broader regional conflict.

Impact of Federal Reserve’s Monetary Policy on Gold Prices

Further influencing the XAU/USD forecast is the Federal Reserve’s current stance on interest rates. The consensus among Federal Reserve policymakers is to maintain current borrowing costs into the foreseeable future due to uneven progress on inflation control and a robust U.S. economy.

This decision impacts gold as higher interest rates typically raise the opportunity cost of holding non-yielding assets like gold.

China’s Role in Gold’s Market Dynamics

Adding another layer to the gold price forecast, China’s ongoing accumulation of gold reserves provides a substantial undercurrent supporting the market.

According to Ilya Spivak, head of global macro at Tastylive, this trend is expected to continue, further enhancing the upward trajectory of gold prices in the international markets.

Economic Indicators

Key economic indicators released today also play a critical role in shaping market sentiment:

  • U.S. Unemployment Claims dropped to 212,000 from the previous 215,000. The Philly Fed Manufacturing Index experienced a significant jump to 15.5, far surpassing expectations.
  • Meanwhile, Existing Home Sales slightly declined to 4.19 million from 4.20 million, and the Conference Board’s Leading Index adjusted down to -0.3% from -0.1%.

As the International Monetary Fund (IMF) meetings continue today, further developments are expected to influence the global economic landscape and, consequently, the gold market.

Gold Prices Forecast

Gold - Chart
Gold – Chart

Gold currently trades at $2,381, marking a modest increase of 0.10%. It hovers slightly above today’s pivot point at $2,363.79, hinting at a restrained bullish sentiment. Immediate resistance is positioned at $2,403.98, with further ceilings at $2,431.98 and $2,459.86.

On the downside, support lies at $2,323.92, extending to $2,296.85 and $2,268.55, which could come into play should the trend reverse. The technical landscape shows the 50-Day Exponential Moving Average (EMA) at $2,359.342, slightly below the current price, suggesting potential near-term support.

Conversely, the 200-Day EMA at $2,251.548 underscores a longer-term upward trend. Today’s candlestick pattern, characterized by a long shadow and small body—an inverted hammer—signals potential weakness in the ongoing bullish trend.

Conclusion: The outlook for gold remains bullish above the pivot of $2,363.79, with any breach below this level potentially catalyzing a sharp decline in prices.

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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