Gold Daily Forecast The gold price (XAU/USD) is recovering strongly on Wednesday, reversing all its previous losses triggered by the strong gains in the Japanese yen (JPY), resulting in a broad-based decline across the US dollar (USD). Furthermore, another pullback in US Treasuries has been offering support for the yellow metal. As of now, XAU/USD is trading at $4386, up nearly 1.34% for the day after touching an intraday low of $4282, the lowest level since August 7. In today's trading session, DXY is hovering around 99.55, easing by 0.15% from the intraday high of 99.86, the strongest since August 14. As can be seen in today's trading session, despite the weakness in the US Dollar index, gold is under selling pressure amid rising inflation concerns. In fact, rising oil prices following renewed tensions in the Middle East have heightened fears. As a result, bond prices fall significantly, pushing yields higher. Despite easing slightly in today's trading session, the benchmark 10-year yield remains close to the multi-year peak of 4.81%, reached in late September 2023. Rising interest rates raise the cost of holding zero-interest assets like gold. In terms of monetary policy measures, speculators ramped up expectations of a Fed policy tightening. After the Jackson Hole speech by Fed Chair Kevin Warsh, in which he sounded more hawkish on inflation, there were expectations of a possible interest rate hike by the Fed in September. Based on the probabilities from the CME FedWatch Tool, the odds of a Fed rate hike at the September 15-16 meetings stand at 70%, up from 36% one week ago. With this scenario, gold might sustain its current uptrend if the USD selling momentum continues. Nonetheless, hawkish Fed projections, rising Treasury bond yields, and risks of higher inflation stemming from the Middle East situation may cap further gains. Speculators look forward to the release of NFP data on Friday. On the daily chart, the gold price is showing strong resistance from the bears. The XAU/USD price marginally surpassed the 100-day Simple Moving Average (SMA) at around $4,361. Currently, at the time of writing, the price is trading at 4384. Thus, the price is providing an unstable support buffer while trading below the Bollinger middle band near $4,450. However, the daily chart Relative Strength Index (RSI) indicator hovers near the 50 mark, while the Moving Average Convergence Divergence (MACD) histogram remains in the negative zone. All of these indicators suggestindicators suggest that there has been a loss of upward bias, resulting in a sideways consolidation bias around the prevailing rate levels. Therefore, if the price remains above, bullish bias persists. In this case, the initial resistance appears at the 20-day Bollinger SMA at $4450. If the buying pressure activity continues gaining momentum. The next critical resistance lies at the upper Bollinger Band around $4685. Furthermore, if the price surpasses the two-week high of 4685, the door will open for a potential rise towards 4825, which would be followed by 5000 as a long-term bulls' target. On the other hand, bears will find the first significant support lies at the 100-day SMA at $4361. If the bearish trend persists, the next critical support is the lower Bollinger Band at $4215. Further depreciation could bring the next psychological support level to $4000.
