Gold (XAU), a traditional safe-haven asset, is in the midst of an unprecedented bull run, marking new record highs and eyeing a fourth consecutive week of gains.
XAU/USD maintains its upward trajectory, propelled by ongoing geopolitical tensions. Despite a resilient US dollar and tempered expectations of Federal Reserve (Fed) rate cuts, the bullish momentum in gold remains steadfast. Heightened concerns over conflicts in the Middle East amplify XAU/USD’s allure as a haven asset, driving the pair up by 1.63% on Thursday. Moreover, the anticipation of interest rate cuts by major central banks later this year adds further impetus to the upward trend in the precious metal. The prospect of monetary policy easing attracts more investors to gold, even as the asset technically enters overbought territory, potentially prompting profit-taking.
Vincent Tie, Sales Manager at dealer Silver Bullion, expresses confidence in gold’s future prospects. “We anticipate a continued rise in gold prices over the next two months. This rally is underpinned by gold prices breaking out of a record 42-month consolidation period. It’s akin to a coiled spring finally being released.” Additionally, unexpectedly low US Producer Price Index (PPI) figures from yesterday have marginally fueled expectations for an imminent Fed rate cut, further reinforcing the upward trajectory of XAU/USD.
Having peaked at 2,395 during the Asian trading session, XAU/USD subsequently experienced a correction. Investors now await the release of the US Michigan Consumer Sentiment report at 2:00 p.m. UTC today. A lower-than-expected reading could propel XAU/USD above the 2,400 mark. However, should the data exceed expectations, the bullish trend in XAU/USD may temporarily halt or even reverse.
