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Gold (XAU) Daily Forecast: Will $2327 Resistance Cap Gains?

By:
Arslan Ali
Updated: Jun 17, 2024, 03:58 GMT+00:00

Key Points:

  • Gold prices rallied despite the Fed's hawkish stance.
  • Double top pattern at $2327 poses a key resistance level.
  • Easing inflation and geopolitical tensions support gold prices.
Gold (XAU) Daily Forecast: Will $2327 Resistance Cap Gains?

In this article:

Market Overview

Gold prices retreated below $2330, on Monday. The Federal Reserve’s unexpected hawkish stance last week, forecasting only one interest rate cut in 2024, has bolstered US Treasury bond yields and the US dollar, applying downward pressure on the non-yielding precious metal.

Inflationary Pressures Ease, Rate Cut Hopes Linger

Despite the Fed’s hawkishness, recent data indicating easing inflationary pressures in the US, including softer consumer and producer prices and a decline in import prices in May, keep alive the possibility of two rate cuts this year.

This, along with geopolitical tensions and political uncertainty in Europe, is providing some support to gold prices and limiting further downside.

Fed Officials’ Diverging Views Add Uncertainty

While some Fed officials, such as Cleveland Fed President Loretta Mester, have expressed openness to rate cuts if inflation continues to decline, others, like Chicago Fed President Austan Goolsbee and Minneapolis Fed President Neel Kashkari, are advocating for a more cautious approach.

This divergence in views adds to the uncertainty surrounding the Fed’s rate-cut path, potentially limiting further dollar appreciation and providing a floor for gold prices.

Short-Term Forecast

Gold prices rallied on Monday despite recent Fed hawkishness, trading at $2332.64. A double top pattern at $2327 presents resistance, but a break above could fuel bullish sentiment towards $2337.38 and $2349.32.

 

Gold Prices Forecast: Technical Analysis

Gold - Chart
Gold – Chart

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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