Market Analysis

Gold prices (XAU/USD) remain under pressure as the European session approaches on Thursday, although they manage to stay above the psychological $2,500 level and close to the all-time high reached earlier in the week. A slight recovery in the US Dollar (USD) from its year-to-date low, aided by a rise in US Treasury bond yields, is a primary factor weighing on the commodity. Additionally, the prevailing bullish sentiment in global equity markets contributes to the soft demand for the safe-haven precious metal.

However, the downside for gold is limited by growing expectations of more aggressive monetary easing by the Federal Reserve (Fed). Data released on Wednesday indicated that US job growth over the past year through March was weaker than initially reported. Furthermore, the minutes from the July FOMC meeting revealed that several Fed officials were inclined toward an immediate rate cut. This, combined with ongoing geopolitical risks, continues to provide support for XAU/USD, urging caution before anticipating any significant corrective decline.

Traders may also prefer to hold off on making fresh directional bets until Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday. In the interim, Thursday’s US economic calendar – which includes the release of the usual Weekly Initial Jobless Claims and Existing Home Sales data – could present short-term trading opportunities for gold during the North American session.

Technical Analysis: Gold Price Near All-Time High, Bulls Maintain Control

From a technical standpoint, the sideways price movement observed since the start of the week can be viewed as a bullish consolidation phase, potentially preceding another upward move. Moreover, oscillators on the daily chart remain in positive territory and are not yet signaling overbought conditions, reinforcing a near-term optimistic outlook. Therefore, a retest of the all-time high around the $2,531-2,532 range, reached on Tuesday, appears likely. Continued buying could trigger further gains and extend the recent well-established uptrend.

Conversely, any significant pullback is likely to attract buyers around the $2,500 level. This should limit gold’s downside near the $2,480 triple-top resistance point. A decisive break below this level could lead to technical selling, dragging XAU/USD down towards the $2,455-2,453 horizontal support, with further declines potentially targeting the $2,430 area. The correction could extend towards the 50-day Simple Moving Average (SMA), currently situated near the $2,400 mark.

Paraphrasing text from "FX Street" all rights reserved by the original author.