🌐Gold (XAU/USD) Forecast:
Gold remains under pressure as a strong US dollar and higher yields on government bonds weaken demand and keep the metal near key support.
A strong US dollar makes gold more expensive for foreign buyers. The price of gold is now consolidating in an important support zone and looking for the next direction.
The metal is set for a second weekly loss, indicating that short-term momentum remains weak today.
Uncertainty in the Strait of Hormuz is also putting pressure on gold.
The key issue is the Federal Reserve System. Markets are expecting increased risk of rate hikes by the end of the year following the release of recent inflation data.
These expectations are bad news for gold. If interest rates rise, the dollar becomes a more attractive asset, while yields on US government bonds increase.
However, if the dollar remains strong and oil maintains some inflationary pressure, gold could find itself on the defensive in the short term.
Gold Technical Analysis – Consolidation at Triangle Breakout:
The daily spot gold chart shows that the price is consolidating on the edge of the support line of the symmetrical triangle.
The price rebounded on Wednesday and then consolidated mutedly on Thursday. This indicates an unclear direction in the short term.
A break above 4,670 USD will offer further growth towards 4,800 USD.
On the other hand, a break below 4,400 USD will indicate further decline towards 4,200 USD and 4,000 USD.
An important support area is also highlighted on the daily chart.
The chart shows that the price is consolidating above the 200-day SMA. The black support line also emphasizes this strong support.
The four-hour chart also shows these consolidations. The chart shows that the price is consolidating between 4,400 USD and 4,860 USD.
Breaking any of these levels will define the next move in the gold market next week.