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21.08.202412:39 Forex Analysis & Reviews: XAU/USD. Analysis and Forecast: Gold Sets a New All-Time High!

Exchange Rates 21.08.2024 analysis

Gold has soared to a new all-time high, driven by the dovish sentiment of the Federal Reserve. It seems that investors are convinced that the Federal Reserve will begin a cycle of monetary policy easing in September by announcing a 25 basis point cut in interest rates. This expectation continues to exert pressure on U.S. Treasury yields, and it remains a key factor supporting gold. Additionally, geopolitical risks, economic challenges in China, and a slight deterioration in market risk sentiment act as tailwinds for the safe-haven asset.

However, the U.S. dollar's modest recovery from its lowest level since January, combined with hopes for a ceasefire in the Gaza Strip, is limiting significant gains in gold prices.

Exchange Rates 21.08.2024 analysis

Traders and investors should also await the release of the minutes from the July FOMC meeting and Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium on Friday to gain insights into U.S. central bank policy. This, in turn, will play a crucial role in influencing the U.S. dollar and determining the short-term trajectory of the XAU/USD pair.

Nevertheless, the fundamental backdrop strongly favors the bulls. From a technical standpoint, last Friday's breakout above the triple top resistance in the $2,480 level and subsequent strengthening beyond the psychological level of $2,500 have been seen as a new trigger for the bulls. Moreover, oscillators on the daily chart remain comfortably in positive territory and are still far from overbought levels. This suggests that the path of least resistance for gold remains upward.

Therefore, any significant pullback may still be viewed as a buying opportunity near the round level of $2,500, which should help the price decline towards the breakout point, the former resistance area around $2,480. However, some further selling pressure could drag the XAU/USD pair down to the next support level around $2,455-$2,450 on its way to the $2,430 level. A convincing break below this last region would push the metal towards the 50-day simple moving average (SMA), currently positioned just below the round level of $2,400.

Exchange Rates 21.08.2024 analysis

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