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Gold Analysis: Record Gains Await Key US Data

The overall upward trend in the price of gold is gaining strength. Its current gains have been sufficient to push all technical indicators towards strong buying saturation levels.

  • As the second quarter of 2024 begins, gold prices have risen to a new record high, continuing the rally that has prompted the Federal Reserve to move closer to cutting interest rates and deepening geopolitical tensions.
  • According to gold trading platforms, prices have risen towards the $2,265 resistance level, the highest in gold price history.

Gold Analysis Today 01/04: Record Gains Await Data (graph)

The performance came after a series of records in recent sessions. Data released on Friday - when many markets were closed - showed that the Federal Reserve's preferred measure of core inflation slowed in February. Obviously, this adds to the sense that policymakers may be comfortable lowering the cost of borrowing this year, although the US central bank has been cautious in its tone.

Gold has been among the best-performing major commodities so far in 2024, recording gains of more than 8% in the first quarter. In addition to the potential for monetary easing by leading central banks, ongoing tensions in the Middle East and Ukraine have strengthened the precious metal's appeal as a haven asset, while buying by central banks and Chinese consumers has also helped support prices.

Will the gold price fall in the coming days?

The positive outlook for gold has been endorsed by a number of leading banks. Among them, JPMorgan Chase & Co. Last month, said that gold is the top pick in the commodities market and could reach $2,500 an ounce this year.

For its part, the Federal Reserve left the federal funds rate unchanged at its highest level in 23 years at 5.25%-5.5% for the fifth consecutive meeting in March 2024, in line with market expectations. Moreover, the Policymakers still plan to cut rates three times this year, similar to the December quarterly forecast. Also, the plot pointed to three cuts in 2025, one less than in December, and three more in 2026. At the same time, US GDP growth is expected to rise in 2024 (2.1% vs. 1.4% in December forecast), 2025 (2% vs. 1.8%). %) and 2026 (2% vs. 1.9%).

Meanwhile, Personal consumption expenditure inflation forecasts were unchanged for 2024 (2.4% vs. 2.4%) but were raised for 2025 (2.2% vs. 2.1%) while the core rate is expected to rise this year (2.6% vs. 2.4%) while the forecast was left unchanged for 2025 at 2.2%. The unemployment rate is expected to fall to 4% in 2024 (vs. 4.1%) but the forecast remained at 4.1% for next year.

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    Gold Price Forecast and Analysis Today:

    The overall upward trend in the price of gold is gaining strength. Its current gains have been sufficient to push all technical indicators towards strong buying saturation levels. Clearly, if the current factors driving its gains persist, such as the weakness of the US dollar, increased global geopolitical tensions, and increased purchases of gold by global central banks, the next record high of $2300 per ounce may be within reach. Generally, the psychological level of $2000 will remain important for the continuation of strong bullish momentum. This week gold prices will be influenced by market reactions and the dollar's response to the announcement of US job numbers and statements from Federal Reserve policymakers led by Jerome Powell.

    Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out. 

    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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