Free Forex Signals

• Gold price struggles to extend its upside amid easing geopolitical risks.
• Both Israel and Hamas have signed a ceasefire agreement to end the war in Gaza.
• The Fed is expected to continue lowering interest rates this year.

Gold price (XAU/USD) trades 0.4% higher to near $3,995.00 during the European trading session on Friday. The yellow metal stabilized after a corrective move on Thursday, which followed a fresh all-time high of nearly $4,060 posted on Wednesday.

Four-day winning streak in the precious metal halted after Israel and Hamas signed a ceasefire agreement to end the war in Gaza. According to the first phase of the ceasefire, the Israeli army has released hostages and Hamas has now 72 hours to release Israeli hostages, BBC News reported.

Theoretically, easing geopolitical tensions diminishes demand for safe-haven assets, such as Gold.

However, the outlook for the Gold price remains firm as comments from Federal Reserve officials have signaled that more interest rate cuts are highly likely in the remaining year.

On Thursday, New York Fed Bank President John Williams and San Francisco Federal Reserve Bank President Mary Daly call for more interest rate cuts this year, citing downside risks to the labour market. “We’re to a point now where the softening in the labor market looks like it could be more worrisome if we don’t risk manage it, Daly said, Reuters reported. On the current status of inflation, Daly stated that growth in price pressures has come “much less than had been feared”.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.

Gold technical analysis

Gold price retraces after posting a fresh all-time high near $4,060. However, the overall trend of the Gold price remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around $3,834.10. The upward-sloping trendline from the August 22 low around $3,321.50 will act as key support for the Gold price.

The 14-day Relative Strength Index (RSI) stays above 60.00 for a long period, suggesting a strong bullish momentum.

On the upside, the Gold price could extend its upside towards $4,100. Looking down, the October 2 high of around $3,900 would act as key support.

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