**Gold Price Forecast: XAU/USD Maintains Upside Momentum Above $2,350 as Fed Rate Cut Expectations Remain Strong**
*Original author: Dhwani Mehta, FXStreet. Additional sources referenced: Reuters, Kitco News.*
**Overview**
Gold prices (XAU/USD) have continued on an upward trajectory, extending gains above the $2,350 mark amidst persistent hopes that the US Federal Reserve will initiate interest rate cuts later this year. The precious metal is buoyed by expectations of a dovish pivot from the Fed, concerns surrounding global economic growth, and ongoing geopolitical uncertainties, all of which enhance demand for safe-haven assets.
This article offers a comprehensive look at the current factors supporting gold, its recent price action, technical outlook, and what to expect in the coming months as central banks around the world navigate a complex macroeconomic environment.
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**Key Drivers Behind Gold’s Current Rally**
Markets are finely tuned to monetary policy cues from major central banks. The anticipation of rate cuts from the US Federal Reserve is a central pillar supporting the gold price. Lower interest rates decrease the opportunity cost of holding non-yielding assets like gold, thus making it more attractive to investors. Several additional factors are also influencing XAU/USD:
– **Federal Reserve Policy Outlook:** The market is increasingly convinced that the Fed may cut rates by the end of 2024, with as many as two cuts priced in by December according to CME FedWatch Tool data.
– **US Economic Data:** Recent US macro data, including softer-than-expected inflation prints and a modest uptick in unemployment claims, have bolstered the case for monetary easing.
– **Geopolitical Tensions:** Heightened risks in regions such as the Middle East, Ukraine, and the South China Sea continue to make gold a preferred hedge against uncertainty.
– **Global Growth Concerns:** Signs of slowing global growth, especially from China and Europe, are keeping risk sentiment subdued and boosting gold’s safe-haven appeal.
– **Central Bank Gold Purchases:** Persistent buying by global central banks, especially in emerging markets like China and India, supports the demand side for gold.
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**Recent Price Action**
– Gold began the latest rally from around $2,300, breaking through significant resistance levels and now comfortably trading above $2,350 per troy ounce.
– The ongoing upside momentum has seen gold setting new record highs in 2024, with analysts from Kitco News noting that the year-to-date return for gold has outpaced most other major asset classes.
– During the most recent trading sessions, gold showed resilience even as US Treasury yields attempted to rebound. This suggests that the buying interest in gold is robust, regardless of minor fluctuations in the bond market.
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**Market Sentiment and Fed Rate Cut Bets**
Expectations for Fed rate cuts remain strong, and the latest Federal Open Market Committee (FOMC) projections and commentary reinforce the dovish market tilt.
– The June FOMC meeting saw policymakers
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