Gold Price Forecast | XAUUSD Plummets As DXY Index Extends Its Gains
Gold (XAU/USD) price is having a pullback after a very strong rebound from the June lows. The precious metal is trading 1.46% lower from its previous close during its New York session. The negative price action can be attributed to a lot of technical and fundamental factors, which are mentioned below.
On Thursday, Gold price per ounce had a good start to the day, and it showed a positive price action during the London session. However, the price dipped just two hours before the start of the New York session. At press time, bullion was trading at $1948, which is its lowest level since July 17.
XAU/USD Slides After Another 25 bps Hike
The US Federal Reserve concluded its latest FOMC meeting on Wednesday with another 15 basis points rate hike. The increase in interest rates was in line with market expectations. Quite unexpectedly, the DXY index still closed the day with a 0.26% loss.
However, the dollar strength index rebounded very strongly on Thursday and was up 0.55% till press time. This led to a sell-off in the precious metals, and Gold price fell to fresh weekly lows. The pullback comes from a key technical level on the chart.
Gold Price Forecast – August 2023
A look at the following XAU/USD chart depicts that despite a pullback, the price is still up 2.5% from its June lows. This rebound can be attributed to the weakness in the dollar since the start of July 2023. The gold chart also shows some resistance above the $1980 level.
The gold price forecast will become very bullish if it breaks above this resistance level. Bulls may target a new all-time high if this happens. However, the recent bounce in DXY can’t be ignored, and close attention must be given to it if you’re trading Gold.
In the meantime, I’ll keep sharing the updated Gold forecast and my personal trades on my Twitter, where you are also welcome to follow me.