FX.co ★ XAU/USD, GOLD

Hello traders, From a technical standpoint, the overbought daily Relative Strength Index (RSI) is a key factor contributing to profit-taking on gold. However, a breakout of the "bullish flag" pattern suggests that any further decline could be seen as a buying opportunity. Analysts not only refrain from changing their forecasts but also adopt a more hawkish stance. For instance, Deutsche Bank has raised its gold forecast for 2026 to an average of four thousand dollars per ounce, citing continued purchases of this asset by central banks, especially the Chinese, and the impact of the Fed's rate cuts. The latter argument is quite dubious, as following the FOMC statement, traders tend to lean towards buying the dollar. Nevertheless, gold indeed remains an asset that can effectively resist the American currency. Currently, the XAU/USD pair has surpassed the level of 3671.88 (Murray 7.8) and reached the D1 Tenkan line. The next important support level is at 3593.75 (Murray 6.8), with a more significant, if not defining, level being the combined level of 3515.62 (Murray 5.8) along with the Kijun line.