- Gold prices are trading within a narrow range, with support preventing significant downward movement.
- Expectations for a potential 50 basis point rate cut by the Fed in November are weighing on the USD, providing additional support for the metal.
- Rising geopolitical tensions also contribute to the bullish momentum ahead of speeches from key FOMC members.
Gold prices (XAU/USD) are struggling to find a clear intraday direction on Thursday, fluctuating within a range below the all-time peak reached the previous day. Expectations for another significant interest rate cut by the US Federal Reserve (Fed) are not providing the necessary support for the US Dollar (USD) to build on its recent recovery from the year-to-date low, which in turn bolsters demand for the non-yielding yellow metal. Additionally, rising tensions in the Middle East and concerns over China's economic recovery, despite recent stimulus measures, are supporting gold as a safe-haven asset.
However, bullish traders appear hesitant and are opting to await further guidance on the Fed's rate-cut strategy before making new investments in gold. As a result, attention will be focused on speeches from key FOMC members, including Fed Chair Jerome Powell, as these will significantly influence near-term USD price movements. Furthermore, upcoming US macroeconomic data—including the final Q2 GDP report, weekly initial jobless claims, and durable goods orders—are expected to create short-term trading opportunities for XAU/USD.
Daily Digest Market Movers: Gold Prices Eye Fed Chair Powell's Speech for Next Direction
The US Dollar is struggling to maintain the strong recovery gains made on Wednesday, largely due to dovish expectations surrounding the Federal Reserve. This backdrop continues to provide support for gold prices, which remain non-yielding.
This week, several Fed officials have attempted to temper market speculation regarding more aggressive monetary easing. However, traders are still pricing in a heightened likelihood of a 50 basis point rate cut in November. As such, Fed Chair Jerome Powell's upcoming speech later today will be closely watched for insights into the future rate-cut trajectory and its implications for the XAU/USD pair.
In addition to Powell’s address, key US macroeconomic data—including the final Q2 GDP figures, the usual weekly initial jobless claims, and durable goods orders—along with speeches from other influential FOMC members, are expected to influence market sentiment.
Meanwhile, initial optimism surrounding a new wave of Chinese stimulus measures announced earlier this week is waning, as doubts about their effectiveness emerge amid broader concerns over a potential global economic downturn. Furthermore, ongoing worries about escalating geopolitical tensions and the risk of a wider conflict in the Middle East are lending additional support to gold as a safe-haven asset.
Technical Outlook: Gold Price Setup Favors Bulls, $2,600 Level Crucial
From a technical standpoint, the Relative Strength Index (RSI) on the daily chart indicates overbought conditions, which is currently hindering bullish traders from initiating new positions. However, this week’s breakout from a short-term ascending trend channel suggests that the path of least resistance for gold prices remains upward. Therefore, the current range-bound price action can be interpreted as a consolidation phase prior to the next upward movement.
In this context, any dips towards the resistance breakpoint of the ascending channel, situated around the $2,625 level, may present buying opportunities, with significant support anticipated near the $2,600 mark. A decisive break below this level could trigger technical selling pressure, potentially driving gold prices down toward the $2,575 region, followed by further support at around $2,560, and the $2,535-$2,530 area where resistance may turn into support.
