CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

Gold Forecast: XAU/USD Poised for Break to Record Highs?

Article By: ,  Head of Market Research
August 29, 2024 7:24 PM

Gold Key Points

  • After a brief swoon back toward $2500 this morning, gold is once again trading near its record high at $2530.
  • The latent risks of deficit spending in the world’s largest economy, even in times of relatively strong economic growth, has stoked interest in alternative stores of value like gold.
  • A clean breakout to new record highs above $2530 would set the stage for a potentially strong continuation toward the upper-$2500s heading into the fall.

It’s been an interesting day amidst an interest month for gold.

The yellow metal briefly shed $20 on the release of this morning’s bigger-than-expected upward revision to Q2 GDP – ostensibly on the idea that the stronger US economy could keep the Fed from cutting interest rates as aggressively as some traders expected – but dip buyers have stepped in aggressively to push gold back toward its record high near $2530 as of writing.

One catalyst supporting gold prices is Fitch’s update to the US credit rating. The ratings agency affirmed the country’s AA+ credit rating, but also forecast that the US fiscal deficit would average 8% over the next three years. The latent risks of deficit spending in the world’s largest economy, even in times of relatively strong economic growth, has stoked interest in alternative stores of value like gold.

More broadly, the yellow metal has weathered the early-August panic well and continues to consolidate near record highs, potentially setting the stage for another leg higher if/when gold breaks out of its 2-week consolidation. Now, gold traders are looking ahead to Core PCE (tomorrow) and the Non-Farm Payrolls report (next Friday) to dial in the expected scale of Fed easing in the coming months.

Gold Analysis – XAU/USD Daily Chart

Source: TradingView, StoneX

Looking at the 4-hour chart, Gold’s recent consolidation pattern comes into focus. The precious metal is forming a potential Cup-and-Handle pattern over the last two weeks, showing strong buying pressure on any near-term dips.

As noted above, a clean breakout to new record highs above $2530 would set the stage for a potentially strong continuation toward the upper-$2500s heading into the fall.

-- Written by Matt Weller, Global Head of Research

Check out Matt’s Daily Market Update videos on YouTube and be sure to follow Matt on Twitter: @MWellerFX

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2024