Gold prices (XAU/USD) have surged for three consecutive days, inching closer to the next cycle high of $1,982.15 per troy ounce. This rally follows remarks made by US Federal Reserve Chair Jerome Powell that exerted downward pressure on the Greenback. Investors are now expecting that the Fed will refrain from further rate increases.
XAU/USD is trading at $1,971.15, marking a significant gain of 1.24%.
During Powell’s appearance at the Economic Club of New York, Wall Street experienced fluctuations, but ultimately, it was trading with losses. Powell emphasized that the Fed’s policy is currently restrictive, and he stated that the central bank would proceed “carefully” in setting its policy. He underscored that a scenario of above-trend growth and a tight labor market “could warrant further tightening of monetary policy.”
As a result of Powell’s remarks, US Treasury bond yields, especially the 10-year benchmark note rate, fluctuated within a ten-basis point range, although it had previously settled at approximately 4.973%. However, these developments failed to bolster the Greenback, which saw a decline of 0.47%, as indicated by the US Dollar Index (DXY), now at 106.05.
On the data front, the US economic calendar included the release of the Philadelphia Manufacturing Index for September, which painted a bleak economic outlook for the region. Concurrently, the US Bureau of Labor Statistics (BLS) reported that Initial Jobless Claims for the previous week had decreased to 198,000, falling below both forecasts and prior figures, which were at 212,000 and 211,000, respectively.
Looking ahead, the coming week will feature speeches by Federal Reserve officials before they enter their blackout period in preparation for the upcoming monetary policy meeting.
XAU/USD Price Analysis: Technical Outlook
Having crossed above the 200-day moving average (DMA) at $1,930.70, gold may now be poised to test the latest cycle high at $1,987.42 before making a push toward the $2,000 mark. Clearing these two levels may pave the way for a challenge of the all-time high (ATH) at $2,081.82.
On the contrary, if sellers regain control and push prices below the psychologically significant $1,950 threshold, this could lead to testing key support levels, including the 200-DMA at $1,930.68, the 100-DMA at $1,922.13, and the 50-DMA at $1,902.54.
