Key points:
Gold prices remained around the $2,600 per ounce mark on Friday, hovering at all-time highs as markets continue to digest key decisions from central banks.
Picture: XAUUSD prices maintained near record highs, as observed on the VT Markets app.
On the charts, we see that gold (XAUUSD) has maintained its bullish momentum, closing at $2,606.79, near its daily high of $2,609.77. The precious metal continues to gain strength as economic uncertainties persist, pushing traders toward safe-haven assets.
On the daily chart, the price has consistently held above the 72-day exponential moving average (EMA), signalling sustained upward momentum. The MACD line has also crossed above the signal line, confirming the strength of the current rally. The price remains comfortably above both the 24- and 72-period EMAs, suggesting a continuation of the trend in the near term.
Key resistance now lies at the $2,610 level, and a breakout could see prices push towards new highs. Conversely, support is expected around the $2,580 level, where the EMA offers a cushion for potential pullbacks.
The Federal Reserve’s decision to cut interest rates by 50 basis points on Wednesday marked its first rate reduction since early 2020. This move, aimed at cushioning the U.S. economy, has sparked a rally in gold, as the lower opportunity cost of holding non-yielding assets like gold typically drives demand higher. Additionally, Fed officials indicated another half-percentage-point reduction by the end of the year, reinforcing the bullish outlook for the precious metal.
China’s People’s Bank of China (PBoC) also kept its benchmark lending rates unchanged, a move that surprised many investors. Meanwhile, the Bank of England (BoE) decided to maintain its key interest rate at 5%, signalling a cautious approach to monetary policy.
These developments across major central banks highlight the global trend toward more accommodative policies, which is likely to keep the bullish sentiment in gold intact.
The continued monetary easing by the Fed could further support such a bullish trend of gold. However, any unexpected hawkish shifts in central bank policy may lead to increased volatility. Traders may consider adjusting gold trading strategy by positioning for potential upside while remaining cautious about potential retracements triggered by sudden market shifts.
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