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XAU/USD Gold Price Analysis Today: Gold is Poised for Historic Breakthroughs

The price of gold is approaching an all-time high as investors accelerate their bets that the Federal Reserve will start cutting US interest rates next year. Accordingly, the price of gold (XAU/USD) moved strongly upward with gains that reached the resistance level of $2052 per ounce, the highest price in six months. Generally, traders are increasingly preparing for a sharp economic downturn and strong easing of US Federal Reserve policy in the coming year. Recently, the speculators in the US Treasury bond market are now the most bullish ever, according to a weekly survey conducted by JP Morgan Chase & Co. since 1991.

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    Obviously, bond yields continued to fall as investors digested comments from Federal Reserve officials on Wednesday. Lately, Cleveland Fed President Loretta Mester indicated she would support continuing to hold interest rates steady at the December meeting, saying policy is “well positioned” to assess whether inflation is on track to return to 2%. Meanwhile, Atlanta Fed President Raphael Bostic said he has become increasingly confident that inflation is firmly on a downward path. Also, his counterpart in Richmond, Thomas Barkin, told CNBC that the US central bank should retain the option to raise rates.

    The Future of Gold Price During Upcoming Days:

    According to trading, the price of gold (XAU/USD) has risen by more than 11% since early October, initially driven by safe haven buying in the wake of the war between Israel and Hamas. Now, prices are within sight of the record highs set during the pandemic, supported by lower yields paid on global bonds that are on track for their best month since 2008. Recently, Gold is less than $30 below its all-time high.

    On the other hand, yesterday's data showed that the US economy grew faster than initial estimates in the third quarter, while consumer spending rose less than expected. Later in the week, investors will look to the Fed's preferred measure of core inflation for further clues on the direction of interest rates.

    On the other side, US stocks rose on Wall Street after some encouraging updates from US companies, including General Motors. According to trading, the Standard & Poor's 500 index rose by 0.1%. The Dow Jones Industrial Average rose 78 points, or 0.2%, to 35,495 points. Similarly, the Nasdaq Composite rose less than 0.1%. According to stock trading, General Motors shares rose by 9.2%. After the company announced a large share buyback, raised its dividend, and told investors that it would have no problem absorbing the costs of the new employment contract. Finally, the stock is still down 6.2% on the year, and the S&P 500 is up more than 18%.

    Gold Price Forecast and Analysis Today:

    As mentioned before, the overall trend for the price of gold (XAU/USD) remains upward and may continue as long as it stays above the psychological resistance of $2000 per ounce. By taking into consideration the recent and current gains, the technical indicators on the daily chart suggest strong buying saturation levels. Therefore, if the US dollar rebounds, gold prices may face quick selling for profit-taking, contingent on the reaction to the upcoming US data announcements today and tomorrow. Based on the performance over the same time frame, a real trend reversal would not occur without a return to the vicinity of the support level at $1985 per ounce.

    XAU/USD (Daily Chart)

    Mahmoud Abdallah
    About Mahmoud Abdallah
    Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.

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