Market Analysis

Gold Price Nears One-Week High, Awaiting Fed Decision for Next Move

Amos Simanungkalit · 31 Jul136.7K Views

Gold prices (XAU/USD) have attracted buying interest following an intraday dip to the $2,400 range, turning positive for the second consecutive day on Wednesday. This marks the third increase in the last four days, driven by a mix of factors, pushing the commodity to a one-week high around $2,419 during the Asian session. The rise comes amid heightened geopolitical tensions, following Israel's attack on Lebanon's capital in response to a rocket strike in the Golan Heights on Saturday, raising concerns of further escalation in the Middle East.

Additionally, a sluggish global economic growth outlook and a pullback in the US Dollar (USD) from a nearly three-week high reached on Tuesday have supported gold prices. However, bulls may adopt a cautious stance, waiting for clearer indications on the Federal Reserve's (Fed) rate-cut trajectory. The focus is now on the outcome of today's two-day Federal Open Market Committee (FOMC) meeting, alongside ongoing geopolitical developments, which will likely influence the short-term direction of XAU/USD.

Technical Analysis: Gold price remains bullish, poised for further gains above $2,400

Technically, the recent rebound from the $2,350 area—near the 50-day Simple Moving Average (SMA) support—and the subsequent move above $2,400 favors bullish traders. Oscillators on the daily chart have regained positive momentum, supporting the potential for further gains. If gold surpasses the $2,412-$2,413 range, it could extend to last week’s swing high around $2,432. A sustained move above this level would suggest that the recent corrective decline from this month’s all-time high has ended, setting the stage for additional gains. The XAU/USD might then target the $2,469-$2,470 area and possibly challenge the record peak of $2,483-$2,484.

Conversely, the $2,400 level now acts as immediate support. If the price falls below this level and reaches the $2,383-$2,382 range, it could slide back to the 50-day SMA, currently near $2,359. A decisive break below this support, followed by a drop under last week’s swing low at $2,353, could trigger bearish sentiment and make XAU/USD more vulnerable. In such a scenario, the price may test the next support around $2,325, eventually approaching the $2,300 round figure.