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Gold Analysis: Gains Are Still in Place

The the bulls will look to ride the current series of gains towards $2,395 or higher to the $2,473 resistance per ounce.

  • At the end of trading last week, gold futures rose to a new record high and thus gained a new bullish trading week.
  • Overall, the price of the yellow metal was in a strong uptrend and showed no signs of slowing down.
  • Gold prices could target $2,400 an ounce before the end of this month as more investors buy gold, even with rising Treasury yields and the US dollar.

Gold Analysis Today 08/04: Gains Are Still in Place (graph)

According to gold trading platforms, gold futures rose to $2,330.30 an ounce, giving gold a third straight weekly gain of nearly 4%, adding to its 13% year-on-year gain since the start of 2024. In the same performance, silver prices, gold's sister commodity, headed higher at the end of the trading week. It rose to $27.38 an ounce. As a result, the price of the white metal will enjoy a 9% weekly jump, in addition to its 14% annual increase.

Overall, US financial markets focused on the stronger-than-expected March jobs data. According to the results of the economic calendar data, the US economy added a total of 303,000 new jobs, while the unemployment rate in the country fell to 3.8%. Average hourly earnings rose 0.3% monthly, slowing to 4.1% on an annual basis. Morver, the labor force participation rate rose to 62.7%, and average weekly hours worked rose to 34.4. Government and related sectors led job gains: healthcare (72,000), government (71,000), and social assistance (9,000). In addition, construction created 39,000 jobs, leisure and hospitality payrolls rose by 49,000, and retail jobs rose by 18,000.

As a result, investors fear that the strong economic picture could force the Federal Reserve to abandon US rate cuts this year, especially if inflation accelerates again. In this regard, Andrew Crabbe, CEO of RedBalloon and a pioneer in developing labor market data analytics for commercial use, said: "While new jobs have increased, so has the pressure on the US Federal Reserve to cut interest rates this year." Added, "Most small business owners no longer believe the Fed will cut rates this year. The March jobs may confirm this sentiment."

Furthermore, given that the futures market is still anticipating a 61% chance of a rate cut at the Federal Open Market Committee (FOMC) policy meeting in June, gold prices are shrugging off dovish.

Obviously, the gold market is sensitive to fluctuations in interest rates because it affects the opportunity cost of holding bullion that does not generate a return. At the same time, the yellow metal is ignoring the skyrocketing rise in Treasury yields and the dollar. Also, the yield on the 10-year Treasury note rose 6.9 basis points to 4.378%. Similarly, the yield on the two-year note rose 7.4 basis points to 4.715%, while the yield on the 30-year note rose 6.5 basis points to 4.536%. concurrently, the US dollar index (DXY), a measure of the dollar against a basket of other major currencies, advanced to 104.43 from an opening of 104.12. As a result, the US dollar index DXY is on track to post a weekly decline of 0.2% but is still up 3% year-to-date. As is known, a rising US dollar is bearish for dollar-denominated commodities as it makes them more expensive for foreign investors to buy.

In other metals markets, copper futures fell to $4.2245 per pound. Also, Platinum futures fell to $932.80 an ounce. Likewise, Palladium futures fell to $1,009.50 an ounce.

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    Gold Price Forecast and Analysis Today:

    The gold price has now advanced to trade a few levels above the 100-hour moving average line. As a result, it rose to overbought levels of the 14-hour RSI. In the near term, and according to the performance on the hourly chart, it appears that the gold price has recently completed an upward breakthrough from forming a gently ascending channel. Also, the 14-hour RSI appears to support a strong short-term bullish bias after entering overbought levels. Therefore, the bulls will target extended gains at around $2,356 or higher at the $2,383 resistance. On the other hand, the bears will be looking to pounce on potential pullbacks at around $2,301 or lower at the $2,274 support.

    In the long term, and according to the performance on the daily chart, it appears that the gold price (XAU/USD) is trading within an upward channel. The 14-day RSI also appears to support a strong bullish bias after rising to overbought levels. Therefore, the bulls will look to ride the current series of gains towards $2,395 or higher to the $2,473 resistance per ounce. On the other hand, the bears will target longer-term pullbacks at around $2,249 or lower at the $2,163 support.

    Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from. 

    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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