Technical Analysis: Gold Price Reaches New All-Time High

Gold’s rise to a new all-time high was driven by speculation regarding potential interest rate cuts by the U.S. Federal Reserve, robust gold purchases by global banks, and heightened investor demand for safe-haven assets.

Recent data showing a slowdown in U.S. consumer inflation and a drop in retail sales have potentially provided the Fed with more flexibility to ease monetary policy this year. Although the Fed’s official stance remains unchanged, investors anticipate a rate cut. Lower interest rates typically boost the appeal of non-interest-bearing assets like gold.

In addition, rising geopolitical tensions in the Middle East are also contributing to the surge in gold prices. Central banks worldwide, including those in China, continue to buy gold to diversify their reserves and reduce reliance on the U.S. dollar.

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Gold (XAU/USD) Technical Analysis

On the 4-hour chart of XAU/USD, a consolidation range has formed above 2374.00, with the growth wave continuing towards 2550.00. The local target of 2450.00 has been reached. A corrective move to at least 2410.00 is expected today. If this level breaks, the correction could extend to 2374.00. Following this correction, growth towards 2550.00 is anticipated. The MACD indicator supports this bullish scenario, with its signal line above zero and pointing up.

On the 1-hour chart, the growth wave to 2450.00 has been completed. A correction to 2410.00 (testing from above) is expected today. After this correction, another growth wave to 2450.00 is expected, potentially extending to 2550.00. The Stochastic oscillator supports this scenario, with its signal line currently above 80 and expected to decline to 20 before resuming its upward trend.

Outlook

Gold has reached a new record high, driven by speculation about potential interest rate cuts by the U.S. Federal Reserve, strong demand from central banks, and increased geopolitical tensions in the Middle East.

Technical analysis suggests a short-term price correction before the resumption of the uptrend and a move toward higher prices. With gold prices being highly sensitive to economic and geopolitical events, investors should keep an eye out for any new developments.

XAU/USD last traded at $2,424.19, down -0.09% today.

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Disclaimer: Wealthy VC does not hold a long or short position in any of the stocks, ETFs or cryptocurrencies mentioned in this article.