Gold (XAU) Daily Forecast: Prices Surge to $2,396 – More Gains Ahead?

Gold Prices Surge on Weak Dollar and Anticipated Fed Rate Cuts

The US dollar remained under pressure due to softer economic data, indicating a faster-than-expected slowdown in the economy. This has fueled speculation about larger interest rate cuts by the Federal Reserve, supporting gold prices.

Government figures revealed that the US trade deficit decreased by 2.5%, dropping to $73.1 billion in June from $75.0 billion in May. This decline was driven by a 1.5% increase in exports of aircraft and US-produced oil and gas.

Markets are now pricing in a 100% likelihood that the Federal Reserve will lower borrowing costs at the upcoming policy meeting in September, with nearly a 70% probability of a 50-basis-point rate cut.

Expected rate cuts by the Federal Reserve, combined with a weaker US dollar, are likely to support higher gold prices. Lower rates and economic uncertainty typically boost gold’s appeal as a safe-haven asset.

Gold Prices Climb Amid Middle East Tensions and China Slowdown

Escalating tensions in the Middle East and concerns about China’s economic slowdown are boosting gold prices. Recent violence includes Hezbollah launching drones into Israel, triggering retaliatory strikes.

Hezbollah’s leader, Sayyed Hassan Nasrallah, vowed revenge for recent Israeli attacks, while Iran called for action against Israel for allegedly killing a Hamas leader.

The conflict has expanded beyond Gaza, causing significant casualties and humanitarian crises. Despite U.S. mediation efforts, hostilities continue, increasing geopolitical risk and enhancing gold’s safe-haven appeal.

Short-Term Forecast

Gold prices are expected to remain buoyant, supported by economic uncertainty and anticipated Federal Reserve rate cuts. Trading around $2,393, gold could test higher resistance levels if US data continues to disappoint.