Gold prices are on the rise, surpassing the 50-day Simple Moving Average (SMA) after a speech by Federal Reserve Chairman Jerome Powell signaled a more dovish stance on monetary policy. This increase in bullish sentiment for the precious metal is supported by various geopolitical factors, creating a favorable environment for Gold in the short term. As XAU/USD trades above $2,340, investors are increasingly optimistic about a potential recovery in the near future.
Investors are closely monitoring Powell’s comments, with expectations growing for an interest rate cut by the Fed in September. Powell’s acknowledgment of progress towards the Fed’s inflation target has reinforced these rate-cut hopes, leading to a positive outlook for Gold. Additionally, ongoing geopolitical tensions in regions like the Middle East and Ukraine, coupled with political uncertainties in Europe and the US, are driving demand for safe-haven assets like Gold.
Technical analysis shows Gold attempting to break above the 50-day SMA, a crucial resistance level that could signal a more bullish phase for the precious metal. If Gold manages to sustain its current momentum, it could reach key levels around $2,369 and $2,388. However, a reversal scenario remains possible if Gold fails to maintain its current bullish trajectory, with a potential downside target at $2,171. Overall, Gold’s outlook remains positive in the long run amid a backdrop of global uncertainties and shifting monetary policies.