Gold Forecast: Is XAU/USD Due a Pullback?
After a minor decline last week, gold prices have bounced back this Monday, benefiting from a weaker US dollar. The recovery follows a remarkable drive that saw gold surpass the $3,000 milestone.
Key Points
- Gold's dramatic rise fueled by strong demand and central bank buying.
- Potential threats to continued price growth include geopolitical stability and increased mining output.
- Watch for the upcoming core PCE Price Index for insights into inflation trends.
Gold Forecast: Reasons for Potential Weaken
Gold is stretching its limits, suggesting a needed cooling-off period. Possible reasons include:
– Diminishing geopolitical risks as commitments to resolve international conflicts increase.
– Higher gold prices prompting miners to ramp up output.
– Slower central bank purchasing due to price elevations.
If stock markets stabilize, freeing up cash flow, this could trigger profit-taking in gold. While immediate impacts may be minimal, ongoing developments should remain in the back of investors' minds.
Upcoming Key US Data: Core PCE Price Index
Gold’s performance may rely on movements in the US dollar this week. We have important economic figures coming out:
- S&P flash PMIs
- Core PCE Price Index due Friday
Technical Analysis: Trade Ideas
While the trend remains bullish, signals of negative divergence emerge, indicating potential downward momentum. Supportive levels are identified:
- First support at $3000
- Next key support around $2930-$2956
Long-Term Outlook & Overbought Conditions
Gold's surge raises overbought indicators—historically, similar RSI levels have led to price corrections. The current trend necessitates keen observation as investors brace for either stabilization or potential declines.
Stay alert! This could be a significant period for your gold investments. For more insights, follow the full analysis by Market Analyst Fawad Razaqzada.