XAU/USD forecast: Gold targets $1,885 resistance
XAU/USD forecast: Gold targets $1,885 resistance
The price of gold rose above $1,880 per troy ounce on Thursday, showing further bullish momentum on the back of a weaker US dollar and lower US Treasury yields as the Federal Reserve continues to pursue a dovish interest rate policy.
U.S. 10-year Treasury yields are falling due to the escalating military conflict between Israel and Hamas. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of global currencies, continues to fall toward 105.50 and currently stands at 105.66.
Recent testimony from Fed officials has shown that many of them have adopted a more neutral stance, with the exception of Michelle Bowman, who is a member of the Federal Reserve Board of Governors and supports the need for further policy tightening to combat inflationary pressures.
It is worth noting that the latest data from the U.S. Department of Labor showed that manufacturers' inflation figures exceeded expectations and some August readings, while the monthly producer price index (PPI) rose less than the previous month, indicating that concerns about high inflation remain.
Many experts believe that with inflation continuing to fall and tensions in the Middle East, the risks of not tightening enough are lower than the consequences of tightening too much.
Currently, the XAU/USD is up 0.33% at $1,881.61.
Gold is expected to make an attempt to develop a price correction and test the resistance area near the $1,885 level. A successful breach of this level will allow the commodity to test the $1,905 level.
On the other hand, the price of gold may fall to the support in the area of $1,860, closing below this level will open the way for the asset to the area of $1,850 and below.
Read also: Technical indicators show a decline in demand for XRP.
