Free Forex Signals

• Gold is hanging close to weekly lows below $4,600 early Friday, as a profit-taking spree returns.   
• The US Dollar holds its recovery amid a recent Oil price rebound, but bulls remain cautious.  
• Bull Cross confirmation on the daily sticks point to a fresh upside in Gold.  

Gold is back in the red below $4,600 early Friday, resuming its corrective decline from 15-week highs of $4,697 earlier this week.

Gold’s fate hinges on Warsh’s words

Gold bulls are consolidating the upside, awaiting Federal Reserve (Fed) Chairman Kevin Warsh’s debut at the annual Jackson Hole Symposium.

In doing so, traders are continuing to take profits off the table, following the recent surge to over three-month highs. They keenly await Warsh’s words for fresh hints on whether an interest rate hike remains a possibility at the Fed’s September 16-17 monetary policy meeting.

Despite hot US core Personal Consumption Expenditures (PCE) Price Index data for July, the CME Group’s FedWatch Tool shows the market keeps pricing in a roughly 65% probability that the Fed will keep rates on hold next month.

The headline PCE Price Index increased 0.2% for the month, putting the annual inflation rate at 3.7%, the Commerce Department reported Wednesday. The market forecast was for 0.1% and 3.6%, respectively. Meanwhile, core PCE posted gains of 0.2% and 3.3%, in line with forecasts. 

Fading hopes for a September Fed rate hike and the optimism over a potential reopening of the Strait of Hormuz keep the US Dollar (USD) recovery in check, limiting any downside in Gold.

However, Gold’s next major move remains at the mercy of the new Fed Chairman, with markets expecting Kevin Warsh to signal a roadmap for fighting inflation while not just sticking to his rhetoric of watching incoming economic data and restoring price stability.

If Warsh disappoints by offering no hints on the path forward for interest rates or fails to address the recent developments around bond markets, that is unlikely to go down with US Dollar traders. In such a scenario, Gold could see a fresh leg north.

That said, any reaction could be short-lived as attention would quickly turn to next week’s US Nonfarm Payrolls data.

Gold price technical analysis: Daily chart

In the daily chart, XAU/USD trades at $4,579.57, holding a clear bullish bias as price stands above the 21-day, 50-day, 100-day and 200-day simple moving averages (SMAs), which all trail beneath the market and reinforce a well-supported uptrend. The Relative Strength Index (14) at 64.55 is in bullish territory but shy of overbought conditions, suggesting positive momentum that still leaves room for further upside before excessive froth becomes a concern.

On the downside, initial support is aligned with the 200-day SMA near $4,527.73, followed by a medium-term demand zone around the 21-day SMA at $4,399.08 and the 100-day SMA at $4,374.69, while the 50-day SMA at $4,208.94 marks a deeper trend-supportive floor. With no nearby technical resistance levels overhead in this dataset, the path of least resistance remains to the upside as long as XAU/USD continues to trade above these stacked moving averages.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Gold longs seen resilient as Dollar debasement theme offsets Jackson Hole risk

According to TD Securities, Commodity Trading Advisors “remain comfortable with their long positions in gold heading into Jackson Hole,” reflecting a constructive backdrop for the metal. The bank cautions that “a more hawkish tone from Fed Chair Warsh would be a catalyst for some reversal in the yellow metal,” but argues that “the bar is likely high to reverse the improved sentiment in precious metals.” Beyond the Fed’s “willingness to look past an energy-driven inflation shock,” TD Securities highlights that “the re-ignition of the dollar debasement theme has also fueled renewed macro discretionary appetite in precious metals.”

• Gold Price Forecast: XAU/USD resumes profit-taking pullback before Warsh’s Jackson Hole speech
• EUR/USD Price Forecast: Buyers remain in charge above the 200-day SMA
• Gold Price Forecast: XAU/USD hits lows sub-$4,600 as US inflation supports the Greenback
• Euro: Rally stalls against US Dollar as spreads drive trade.
• $4700 back on Gold buyers’ radar as US core PCE inflation data looms