Gold Price Forecast: XAU/USD rallies further with bulls eyeing $4,380 area
- Gold extends gains beyond $4,300, on track for a nearly 7% rally this week.
- Some market experts warn about a soft Nonfarm Payrolls reading later on Friday.
- XAU/USD has broken the bearish structure and aims for the $4,380 resistance area.
Gold (XAU/USD) resumes its bullish trend on Friday, after a brief consolidation on Thursday, to reach fresh three-week highs above $4,300, with bulls aiming for mid-June highs in the $4,380 area. The precious metal is on track for its strongest weekly performance since January, with a nearly 7% gain, although further appreciation is likely to depend on the outcome of July’s Nonfarm Payrolls (NFP) due later in the day.
The market consensus forecasts a net increase of 80K payrolls, from 57K in June, although analysts from some of the world’s major commercial banks are keeping a cautious view.
Deutsche Bank experts are anticipating a more modest improvement in today’s labour market report, with a “slight uptick in headline (+65k forecast vs. +57k previously). They note that such an outcome “would put the latest readings below the 3- and 6-month moving averages, consistent with the recent slowing in the weekly ADP reports,” underscoring a gradual cooling in hiring momentum rather than a sharp deterioration.
Technical Analysis: Gold confirms a trend shift
XAU/USD trades at $4,315.19, keeping a constructive near‑term bias after breaking the downward trendline resistance from April highs earlier this week. Relative Strength Index (RSI) studies highlight overstretched levels on intraday charts, although the daily chart shows room for further appreciation, at 67. The daily Moving Average Convergence Divergence (MACD) keeps trending higher, reinforcing the bullish view.
Above $4,300, the next hurdle lies at the June 15 and 17 highs in the mentioned $4,380 area. Further up, the late-May lows just ahead of $4,600 will come into focus. Supports are at Thursday's low of $4,223, ahead of the broken trendline, now around $4,050, and the July 31 and August 3 lows, around the $4,000 level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
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