Gold (XAU) Daily Forecast: Price Rise to $2,341; More Upside Ahead?

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Published: May 27, 2024, 06:39 GMT+00:00

Key Points:

Gold prices rose modestly in Asian trading, recovering some of last week’s losses.
Traders await critical U.S. inflation data and cues on interest rates this week.
U.K. and U.S. market holidays subdued broader trading volumes on Monday.

Gold (XAU) Daily Forecast: Price Rise to $2,341; More Upside Ahead?

Market Overview

Gold prices experienced a modest rise to $2,341 in Asian trading on Monday, recouping some of last week’s losses. This uptick is attributed to cautious trading ahead of a critical U.S. inflation reading due this week.

The U.K. and U.S. market holidays further subdued broader trading volumes. Traders are also awaiting more cues on U.S. interest rates, which have restrained significant market moves.

PCE Data and Interest Rate Expectations

This week’s focus is on the Personal Consumption Expenditures (PCE) price index data, the Federal Reserve’s preferred inflation gauge, due on Friday. Recent statements from Fed officials about persistent inflation have led traders to largely discount the possibility of rate cuts this year.

According to the CME Fedwatch tool, traders now expect the Fed to keep rates unchanged in September, initially anticipated as a likely period for a rate cut. This expectation has exerted pressure on gold prices, with traders favoring the dollar and Treasuries instead.

Industrial Metals and Safe Haven Demand

Among industrial metals, copper prices also saw a rise, recovering from a tumble last week. Despite the general market caution, other precious metals also recovered from last week’s losses.

The waning safe-haven demand for gold has impacted its price, but the broader trend remains cautious optimism.

Short-Term Forecast

Gold prices are expected to remain stable, with potential bullish movement above $2,325.38. Key resistance levels at $2,350.62 and $2,366.30 suggest room for upward momentum, while support at $2,306.63 stabilizes the downside.

Gold Prices Forecast: Technical Analysis

Gold – Chart

Gold is trading at $2,341.69, marking a slight increase of 0.39%. The pivot point at $2,325.38 serves as a critical level for market direction. Immediate resistance levels are $2,350.62, $2,366.30, and $2,392.21, while support levels are $2,306.63, $2,285.77, and $2,267.42.

Technical indicators show the 50-day Exponential Moving Average (EMA) at $2,369.75 and the 200-day EMA at $2,333.55. These indicators suggest mixed signals, with the price hovering near significant moving averages.

The outlook remains bullish above $2,325.38, but a break below this pivot point could trigger a sharp selling trend.

About the Author

Arslan Aliauthor

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.