Gold (XAU) Daily Forecast: Prices Dip to $2,325; Eyes on US GDP Figures

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Updated: May 30, 2024, 06:26 GMT+00:00

Key Points:

Gold prices fell to $2,325 in Asian trade on Thursday, pressured by a stronger dollar.
Anticipation of U.S. economic readings weighs on gold prices amid rising U.S. Treasury yields.
Geopolitical tensions in the Middle East support gold as a safe-haven asset.

Market Overview

Gold prices fell in Asian trade on Thursday, pressured by a stronger dollar and rising U.S. Treasury yields. This decline comes as traders await key economic data likely to influence interest rates. Gold (XAU/USD) is currently trading at $2,325.

Gold Faces Pressure from Stronger Dollar and Treasury Yields

The dollar rose to a two-week high, driven by concerns over prolonged high U.S. interest rates. This pushed benchmark U.S. Treasury yields higher, diverting investments away from gold. The yellow metal has lost its gains from earlier this week, driven lower by these economic pressures.

Upcoming Economic Data and Fed Rate Expectations

Anticipation of U.S. economic readings is weighing on gold prices. Revised first-quarter GDP data, due later on Thursday, is expected to show resilience in the economy, with a forecasted annual growth rate of 1.3%.

Additionally, the PCE price index, the Fed’s preferred inflation gauge, is expected to rise by 0.3% month-over-month and 2.8% year-over-year in April.

This data follows statements from Fed officials suggesting limited confidence in near-term rate cuts, reducing the likelihood of a September cut.

Geopolitical Tensions and Central Bank Demand

Despite the bearish outlook, ongoing geopolitical tensions in the Middle East could support gold as a safe-haven asset. The Israeli military’s recent actions and rising central bank demand are expected to limit gold’s downside in the near term.

Short-Term Forecast

Gold (XAU/USD) is currently trading at $2,325. Anticipation of US economic data, particularly GDP and PCE figures, will likely drive market sentiment. A break above $2,326 could signal bullish momentum, while below this level, bearish pressure may persist.

Gold Prices Forecast: Technical Analysis

Gold – Chart

Gold (XAU/USD) is trading at $2,324.71, down 0.05%. The pivot point, marked in green, is at $2,326.04. Immediate resistance levels are $2,335.80, $2,351.05, and $2,366.30. Key support levels are $2,304.38, $2,285.77, and $2,269.30.

The 50-day Exponential Moving Average (EMA) is at $2,357.00, and the 200-day EMA is at $2,335.85, indicating a bearish outlook below these levels. Technical indicators show a bearish trend below the pivot point of $2,326.04.

A break above this level could signal a bullish bias, targeting the resistance levels, while staying below it may drive the price toward immediate support. Traders should monitor these key levels for potential market movements.

In conclusion, the outlook for gold remains bearish below $2,335, with potential for bullish movement if it breaks above this level.

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.