Gold Price Forecast: XAU/USD Eyes New Highs Amidst US Data and Fed Chair Powell’s Speech
Gold Price Forecast: Gold (XAU/USD) has been on a volatile journey recently, challenging the critical $2,500 level in Thursday’s Asian session as traders prepare for key US economic data and upcoming statements from Federal Reserve Chair Jerome Powell. The market’s focus remains on the US Preliminary PMI data and Powell’s speech at Jackson Hole, which are expected to provide fresh insights into the Fed’s interest-rate outlook and, consequently, the future direction of gold prices.
Gold Price Pullback: A Prelude to Fresh Record Highs?
The gold price experienced a pullback early Thursday, driven by profit-taking and a rebound in the US Dollar (USD) and Treasury bond yields. This decline came on the heels of a dovish interpretation of the Federal Open Market Committee (FOMC) minutes from its July meeting. The minutes revealed that most policymakers were inclined to ease monetary policy if the data continued to align with their expectations. This dovish stance initially boosted gold prices, helping them recover and settle above $2,500.
However, the recent pullback has raised questions about whether this is a temporary correction or a sign of a more significant downward trend. The technical setup suggests that the gold price remains in a bullish phase, with the pullback potentially setting the stage for a fresh rally to new record highs.
US PMI Data and Fed Chair Powell’s Speech: The Next Catalysts
The upcoming US Preliminary S&P Global Manufacturing and Services PMI data will be closely watched by gold traders, as it could provide clues about the health of the US economy and the Fed’s potential policy moves. Additionally, Fed Chair Jerome Powell’s speech at the Jackson Hole symposium on Friday is expected to be a pivotal moment for the market.
Powell could use the platform to reinforce the Fed’s dovish stance, which was highlighted in the FOMC minutes. The market is already pricing in a significant probability of a rate cut at the September Fed meeting, with some expecting a 50 basis points (bps) reduction. Any signals from Powell regarding the size and timing of future rate cuts could have a profound impact on the gold price.
Middle East Geopolitical Tensions: A Supportive Factor for Gold
While US economic data and Fed policy are the primary drivers of gold prices, geopolitical risks also play a crucial role. Tensions in the Middle East, particularly between Israel and Hamas, have recently provided additional support for gold as a safe-haven asset. The ongoing conflict and Israel’s refusal to withdraw troops from the Philadelphi corridor on the Egypt-Gaza border have added a layer of uncertainty to the market, helping to cushion the downside in gold prices.
Technical Outlook: Gold Price Remains a ‘Buy-the-Dips’ Opportunity
From a technical perspective, gold’s recent pullback appears to be a healthy correction within a broader uptrend. The symmetrical triangle breakout remains intact, and the 14-day Relative Strength Index (RSI) continues to favor buyers, holding well above the 50 level.
If the gold price declines further, immediate support is seen at Monday’s low of $2,486. A break below this level could lead to a test of the triangle resistance-turned-support at $2,467, with the $2,450 psychological barrier providing additional support. On the upside, a move above the recent record high of $2,532 would open the door for a rally toward the $2,550 level, with the $2,600 round figure serving as the next major target.
Conclusion: Gold’s Path Forward Hinges on US Data and Fed Policy
As gold traders navigate the current market environment, all eyes are on the upcoming US Preliminary PMI data and Fed Chair Powell’s speech. These events will likely set the tone for gold prices in the near term, determining whether the metal continues its march toward new record highs or faces a deeper correction. For now, the technical outlook remains favorable for buyers, with the pullback seen as a potential buying opportunity within an ongoing uptrend.
