On Wednesday, the price of gold (XAU/USD) surged above $2,420, rebounding strongly from intraday lows near $2,400. This marks the third rise in four days, propelling the commodity to a one-week peak around $2,419 during the Asian trading session. The uptick is attributed to a confluence of factors, including geopolitical tensions following an Israeli strike on Lebanon’s capital in response to a rocket attack in the Golan Heights last Saturday.
Additionally, a cautious global economic growth outlook and a retreat in the US Dollar from its recent three-week peak on Tuesday have bolstered the appeal of gold. However, market bulls appear tentative, opting to await further clarity on the Federal Reserve’s stance regarding potential interest rate cuts. All eyes are now on the Federal Open Market Committee (FOMC) meeting concluding today, which is expected to shape the short-term trajectory of XAU/USD alongside unfolding geopolitical developments.
Technically, the recent bounce from the $2,350 area, supported by the 50-day Simple Moving Average (SMA), underscores bullish sentiment. The breach above $2,400 reinforces this stance, with daily chart oscillators gaining positive momentum, signaling potential for further upside. A break above the $2,412-2,413 range would solidify bullish convictions, paving the way for a retest of last week’s high near $2,432. Continued strength could then target intermediate barriers around $2,469-2,470, with potential sights set on challenging the record peak around $2,483-2,484.
Conversely, immediate support lies at $2,400, guarding against downside risks towards $2,383-2,382. A breach below this level might expose the 50-day SMA near $2,359, and a subsequent drop below last week’s low of approximately $2,353 could prompt further bearish sentiment, potentially testing supports near $2,325 and the $2,300 mark.
The trajectory of XAU/USD remains dependent on developments from the FOMC meeting and geopolitical events, shaping market sentiment in the near term.