Article by: ETO Markets

Gold price (XAU/USD) hovered above the psychological $2,500 level and held near the all-time high reached earlier this week. Expectations of a Fed rate cut continued to support gold prices, with several officials favoring an early start, which also helped push the dollar down to its lows for the year. In addition, the latest US employment data showed a weak Labour market and weaker-than-expected job growth, further strengthening market expectations for the Federal Reserve to cut interest rates. In this macro context, the safe-haven properties of gold have been strengthened. At the same time, geopolitical risks continue to exist, especially in the Middle East where the conflict between Israel and Hamas has failed to reach a ceasefire agreement, raising the risk of further escalation of regional conflicts. That also provided support for gold prices. However, as the market has improved on the global economic recovery and risk appetite, investors chose to remain cautious for the time being and wait for more clues ahead of Fed Chairman Jerome Powell's speech at Jackson Hole.

From a technical point of view, the volatility of the gold price at the beginning of the week was mainly bullish consolidation. Gold prices held steady above the psychologically key $… level, showing significant buying support. On the daily chart, the volatility indicator remains in positive territory, indicating that in the short term gold prices are expected to continue to rise, possibly retesting Tuesday's all-time high of $…-…. A further break above all-time highs could attract more buying and push gold prices into a new uptrend. However, in the event of a pullback, the $.. support level should limit the downside. Further declines could test technical support near $… and could even dip into the $…-… area. If it breaks below this support level, gold could continue its pullback toward the $… area near the 50-day moving average (SMA).