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Gold surges past $2,000 as US inflation concerns persist

Published by
Nonhlanhla P Dube
  • Gold price (XAU/USD) has surpassed the key $2,000 support level amid the downbeat US Dollar and signals of easy monetary policy from the Federal Reserve officials.
  • Optimism surrounding China’s economic growth and recession woes in the West have also propelled the XAU/USD prices.
  • The Gold price is expected to challenge the $2,030 hurdle and move towards the previous yearly high of $2,070 and then the record high of 2020 around $2,075.

Gold price (XAU/USD) has been on a steady rise, hitting an intraday high of $2,020 and marking a three-day winning streak. The key $2,000 support level, now acting as a support, was surpassed with ease, largely due to the bearish US Dollar.

The US Dollar Index (DXY) has experienced four consecutive weekly losses, primarily due to underwhelming US inflation data. This, coupled with the Federal Reserve’s signal of an easy monetary policy, has further weighed down the DXY and driven up the Gold price. Positive sentiment surrounding China’s economic growth has also fueled the XAU/USD prices despite mixed inflation and trade numbers.

Despite a light calendar and policymakers’ repeated comments, the market’s latest inaction has not immediately impacted the Gold price movements. However, the market is looking towards evidence of the easing of US inflation and a Federal Reserve policy pivot for immediate directions.

According to the Technical Confluence Indicator, the Gold price has managed to stay above the $2,000 key support level, which comprises the Fibonacci 38.2% on one-week, Pivot Point one-day S1 and previous daily low. The XAU/USD’s sustained trading beyond the immediate resistances, now supports, has also given buyers hope.

The next key levels to watch out for are the Fibonacci 23.6% in one-week at around $2,014, followed by $2,010 support confluence, which includes the previous monthly high and SMA10 on four-hour (4H). The Gold price appears ready to take on the $2,030 hurdle, which encompasses Pivot Point one-day R1. Beyond that, the previous weekly high near $2,035 and Pivot Point one-week R1 around $2,045 can prod the XAU/USD bulls before directing them to the previous yearly high of $2,070 and then to the record high marked in 2020 around $2,075.

Overall, Gold price seems to be on an upward trajectory, driven by a combination of factors, including a weak US Dollar, positive China economic growth sentiment, and Federal Reserve signals of easy monetary policy. Investors are closely monitoring the next key levels for the XAU/USD, which will give them a better sense of the direction the price is headed.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

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Published by
Nonhlanhla P Dube

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