Gold Price Holds Steady at $2,317 Amid Rising Geopolitical Tensions and Fed Speculations

The Gold (XAU/USD) price forecast shows a slight uptick to $2,317.31, a modest 0.04% increase, reflecting a cautiously bullish sentiment...

Written by: Arslan Butt • Wednesday, May 8, 2024 • 1 min read

• Last updated: Wednesday, May 8, 2024

The Gold (XAU/USD) price forecast shows a slight uptick to $2,317.31, a modest 0.04% increase, reflecting a cautiously bullish sentiment in the current trading environment.

The precious metal’s price movement remains anchored around the $2,315 mark, peaking at $2,321.43 due to heightened market uncertainties and increasing geopolitical tensions, particularly due to the ongoing conflict in Gaza. This scenario has enhanced gold’s appeal as a safe-haven asset, as investors seek stability amid fluctuating market conditions.

Impact of Federal Reserve’s Policy on Gold Prices

Despite the upward trend, the future of gold prices faces potential volatility from the monetary policy direction indicated by Federal Reserve officials. Recent hawkish comments suggest a diminishing likelihood of interest rate cuts in 2024, which traditionally would lend support to gold prices. Upcoming speeches by Federal Reserve policymakers Philip Jefferson, Susan Collins, and Lisa Cook could further influence market dynamics, potentially strengthening the dollar and placing downward pressure on gold prices.

Technical Analysis and Future Outlook

In technical terms, gold’s trading dynamics are defined by key resistance and support levels. The immediate resistance levels are set at $2,349, $2,370, and $2,393, which could limit gains if gold attempts an upward push. On the downside, support is established at $2,296, with further cushions at $2,277 and $2,260, which may offer buy-in points during price dips.

The 50-day Exponential Moving Average (EMA) at $2,315 closely aligns with current prices, providing near-term support and reinforcing the pivotal $2,330 mark as a crucial threshold for future price direction. A sustained movement below this pivot point could suggest a bearish trend, while maintaining above it might indicate potential for further gains.