Gold Price Forecast: XAU/USD Poised to Retest All-Time High at $2,450

Gold prices are poised to extend their recent gains, having reached a new two-month high of $2,440 on Monday. Increasing expectations of a U.S. Federal Reserve (Fed) interest rate cut in September continue to support the non-interest-bearing gold price.

Federal Reserve Rate Cut Expectations and Gold Price Forecast

Fed Chairman Jerome Powell's recent statements have bolstered the likelihood of a rate reduction in September. He indicated that the central bank would not wait for inflation to reach 2% before lowering interest rates, instead seeking "greater confidence" that inflation will return to this target.

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Powell's remarks contributed to a decline in the U.S. Dollar (USD) and U.S. Treasury bond yields, driving gold prices toward the all-time high of $2,450.

Market Reactions and Economic Data Impacting the Gold Price Forecast

Earlier, gold prices experienced some corrective movements as the USD strengthened due to risk aversion following an assassination attempt on former President Donald Trump during a Pennsylvania rally. Investors, digesting this event, increased the odds of Trump's success in the U.S. Presidential race.

Additionally, investors turned to the USD as a safe haven after China's second-quarter GDP growth missed expectations. According to data from the National Bureau of Statistics (NBS), China's economy grew by 4.7% year-on-year from April to June, down from 5.3% in the previous quarter, marking the weakest growth since the third quarter of 2023.

Current Trading and Future Outlook in the Gold Price Forecast

In Tuesday's trading, gold prices are gaining momentum for another push higher, even as the USD makes a modest recovery. The rebound in the USD/JPY pair can be attributed to the uptick in the USD. However, weak U.S. Treasury bond yields continue to support gold prices.

The precious metal is also buoyed by dovish comments from San Francisco Fed President Mary Daly, who expressed confidence that inflation is on a downward trend.

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Later in the day, the U.S. Retail Sales report and further statements from the Fed will be closely watched. Weaker-than-expected retail sales data could reinforce USD selling, further lifting gold prices.

Speculation that China may introduce stimulus measures to enhance economic performance could also have a positive impact on gold in the near term.

Technical Analysis Supporting the Gold Price Forecast

Gold prices are keeping an eye on the all-time high of $2,450, with the 14-day Relative Strength Index (RSI) trending upwards near 65.

The bullish outlook is supported by the Bull Cross, where the 21-day Simple Moving Average (SMA) has settled above the 50-day SMA since Friday.

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Gold buyers need a daily close above the previous two-month high of $2,425 to challenge the record high of $2,450. Before that, the new two-month high of $2,440 could present a hurdle for bearish sentiment.

On the downside, any pullback in gold prices could test the $2,400 level, with further support at Friday's low of $2,391. The next relevant support levels are at the July 11 low of $2,371 and the psychological level of $2,350.

News Source:- fxstreet.com