Analyzing the Surge in Gold Prices and Its Implications

Gold prices have been on a continuous upward trajectory, with a new peak of 2460 USD per troy ounce reached on Friday. This surge is primarily fueled by the growing anticipation that the US Federal Reserve will soon lower interest rates. The signals from the Fed’s July meeting, along with weaker-than-expected US economic data, have further strengthened this expectation. Declining US manufacturing activity and a spike in unemployment claims indicate a potential economic slowdown, leading to speculation about an imminent rate cut by the Fed, possibly as early as September.

Geopolitical Tensions and Safe-Haven Appeal

In addition to economic factors, escalating tensions in the Middle East have enhanced gold’s appeal as a safe-haven asset. The uncertain geopolitical landscape adds another layer of support for the rising prices. This increased demand for gold as a hedge against instability and market volatility contributes to the bullish trend in the gold market.

Technical Analysis of XAU/USD

Analyzing the technical aspects of the gold market, on the H4 chart, XAU/USD has shown a growth wave to the level of 2422.22, forming a consolidation range around this level. With a potential upside exit, the growth wave is expected to continue towards 2474.50, with a local target in sight. After reaching this level, a correction to 2422.22 may be considered before a new wave of growth towards 2490.90. The MACD indicator confirms this scenario with its signal line above the zero level and trending upwards.

On the H1 chart, a consolidation range around 2446.00 has been formed, suggesting a possible wave continuation to the local target of 2474.50 with an upside exit. After reaching this level, a correction to 2422.22 is likely. The Stochastic oscillator supports this scenario, with its signal line above 80 and preparing for a decline.

Investors and traders are advised to closely monitor these levels, as developments related to the Fed’s decisions and geopolitical tensions could have a significant impact on future price movements in the gold market. With a combination of economic, geopolitical, and technical factors at play, the gold market remains dynamic and subject to rapid changes.