Weekly Report
A Bullish Path Ahead?
Recap of Last Week
Gold (XAUUSD) had an eventful and ultimately bullish week. Following the Federal Reserve’s decision to cut interest rates by 25 basis points, gold prices surged to a new all-time high of approximately $3,707. This move was widely anticipated, as lower interest rates reduce the opportunity cost of holding non-yielding assets like gold. However, the subsequent press conference by Fed Chair Jerome Powell was interpreted as less dovish than some investors had hoped,leading to a quick pullback from the highs. Despite this, the yellow metal managed to hold its ground and closed the week strongly, securing a fifth consecutive weekly gain. The primary catalyst for last week’s price action was the Federal Reserve’s monetary policy decision, coupled with ongoing geopolitical tensions which continue to bolster gold’s safe-haven appeal.
Future Forecast
Weekly Outlook
Based on the recent price action and the broader context of a global easing cycle, the sentiment for gold this week remains bullish. While the market has digested the initial Fed rate cut, the underlying themes of a weakening US Dollar, continued central bank purchases, and persistent geopolitical uncertainty are likely to provide a strong floor for gold prices. The recent all-time high suggests significant upward momentum, and any pullbacks are likely to be seen as buying opportunities. However, the market is now in uncharted territory, and volatility may be higher than usual as traders navigate new price levels.
Key Actions
Preparation for the week
To effectively monitor gold’s price action this week, focus on the following:
Upcoming
Economic Events
Higher Uncertainty Flagged: The speeches from FOMC members Williams, Barkin, and Mester carry a high degree of uncertainty. Their comments could either reinforce or contradict the market’s current expectations for future rate cuts, leading to significant and swift price movements in gold.
Price Analysis
Key Technical Levels
Rising Trendline: On the daily chart, a long-standing bullish trendline remains intact, guiding the price action upward. As long as the price stays above this trendline, the bullish bias is confirmed.
Price Barriers: Resistance
$3,707
Price Floors: Support
$3,660
$3,630
Trade Insights
Potential Trades
Given the strong bullish momentum and the potential for a retest of the all-time high, a long position is the most viable option for the week.
Long
Long Position
High potential due to confirmed uptrend and clear support levels.
Reason
Trend continuation and bounce off a new support level.
Time Frame
4-hour, Daily
Entry Level
A confirmed bounce off the $3,660 support level. Wait for a bullish candle pattern (e.g., hammer, engulfing) on the 4-hour chart near this zone.
Take Profit
Aim for a retest of the recent all-time high at $3,707, with a secondary target at $3,730.
Stop Loss
Place the stop loss below the $3,630 support zone, for example, at $3,620.
