Gold (XAU) Price Forecast: Gold Near Record Highs Amid Rate Cut Signals from Powell

Gold Prices Surge Toward Record Levels

Gold prices are inching closer to their all-time high on Monday, propelled by a declining U.S. dollar and dovish signals from Federal Reserve Chair Jerome Powell. Currently, XAU/USD trades at $2522.93, reflecting an increase of $10.44 or +0.42%. Spot gold trades just $7 below its record peak of $2,531.77 recorded last week.

Powell's Dovish Comments Signal Rate Cuts

Powell’s recent remarks at the Jackson Hole Symposium pointed to potential rate cuts, a move intended to address the cooling U.S. labor market. Expectations for a cut in September have surged, with the CME FedWatch tool indicating a 64% probability for a 25 basis point cut.

Lower Interest Rates Favor Gold Investments

• Lower Interest Rates: The drop in interest rates boosts gold’s allure as a safe-haven asset.
• Increased Demand: Analyst forecasts predict increased demand for gold due to impending rate cuts.
• Central Bank Purchases: Continued central bank interest in gold supports its resilient market presence.

Strong Demand from India and Globally

With the festive season approaching, India's gold consumption may soar following a cut in import duties. Moreover, central banks globally are on path to accumulating gold reserves.

Market Outlook for Gold Prices

With Powell's dovish positioning and expected rate cuts on the horizon, gold's price trajectory seems bullish. Traders should closely monitor U.S. economic indicators that will influence Fed policy decisions.

Technical Analysis: Daily Gold (XAU/USD)

XAU/USD is approaching the potential breakout level at $2531.77. Current support levels are noted at $2482.00 and $2470.85, with downward momentum shifting if these levels are breached.