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19.09.2024 04:29 PM
XAU/USD. Analysis and Forecast

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Today, the price of gold is regaining positive momentum after retracing from yesterday's record high.

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The price of gold is recovering positive momentum today after retreating from its historic high yesterday. The U.S. dollar experienced an intraday reversal from its weekly high, pausing its recovery from the lowest level seen in 2023. At the same time, concerns over economic slowdowns in the United States and China, along with the risk of escalating tensions in the Middle East, are driving safe-haven demand for the precious metal.

With today's positive movement, the yellow metal appears to have broken a two-day losing streak. However, the reduced likelihood of more aggressive easing by the Federal Reserve may limit further gains in the precious metal. Yesterday, the U.S. central bank initiated its policy easing cycle by lowering borrowing costs by 50 basis points. However, the Fed downplayed market expectations for a more significant reduction in interest rates moving forward. This continues to support a modest rise in U.S. Treasury yields, limiting losses in the U.S. dollar and constraining further gains in gold.

From a technical perspective, any further decline in price is likely to find solid support near the previous cycle's high around the $2,532 level. Further selling could expose the next support around $2,511, below which the price could accelerate its corrective decline toward the psychological level of $2,500. The downward trajectory could extend further to the $2,470 level, where it meets the 50-day simple moving average (SMA) and the lower boundary of the short-term upward channel. This confluence point should act as a key pivot, and a decisive break below it could shift the short-term bias in favor of the bears.

On the other hand, the new record high of $2,600 set yesterday serves as immediate resistance. A continued upward movement would allow the price to challenge the trend channel resistance, currently near the $2,610-2,612 area. A convincing breakout through the channel would be seen as a fresh trigger for aggressive bulls, laying the groundwork for the extension of the well-established uptrend seen over the past three months.

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