FX.co ★ Moon-Night | XAU/USD, GOLD

Analysis of GOLD in 1-Hour Time Frame Gold has witnessed an increase in buying activity over the past week, trading slightly below the overnight high as it enters the European session on Friday. The recent US GDP report for Friday highlighted a notable loss of growth momentum in early 2024 and unwelcome inflation growth, providing some support to the precious metal. However, this upward trend is somewhat tempered by renewed US dollar purchases fueled by hawkish expectations regarding the Federal Reserve. Traders anticipate a delay in potential interest rate cuts by the US central bank due to persistent inflation, which is supporting higher yields on US Treasury bonds and strengthening demand for the US dollar. Additionally, the overall positive sentiment in stock markets is capping the rise in gold prices as a safe-haven asset. Market participants are eagerly awaiting the release of the US Personal Consumption Expenditures Price Index to gauge the Fed's rate cut trajectory and determine their next directional bias for gold.

From a technical standpoint in the 1-hour time frame, the XAU/USD pair is facing resistance in breaking above the 50-period simple moving average around the 2355 level. A 1-hour candle closing above this level could signal further upside potential for bulls towards 2374. Continued strength in this region would likely act as a bullish trigger, potentially pushing gold prices towards 2388. Conversely, bearish traders may consider selling opportunities after a close below 2340, with the next support level targeted at 2310. Traders should closely monitor these key levels and economic data releases to adapt their trading strategies effectively in the evolving gold market environment.