Select Language

Gold Price Forecast: XAU/USD returns above 20-day EMA as Fed dovish bets soar

Breaking news

Gold Price Forecast: XAU/USD returns above 20-day EMA as Fed dovish bets soar

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.08.04 20:15
Gold Price Forecast: XAU/USD returns above 20-day EMA as Fed dovish bets soar

update 2025.08.04 20:15

  • Gold price rebounds above the 20-day EMA amid accelerating Fed interest rate cut bets.
  • Soft US NFP data has weighed heavily on US Treasury yields.
  • Gold price oscillates inside the Symmetrical Triangle formation.

Gold price (XAU/USD) clings to gains near Friday's high around $3,350 during the European trading session on Monday. The precious metal trades firmly as cooling labor market conditions have forced traders to raise bets supporting interest rate cuts by the Federal Reserve (Fed) in the September meeting.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold. Meanwhile, 10-year US Treasury yields trade vulnerably near almost three-month low around 4.20%.

The US NFP report showed on Friday that the economy added 73K fresh workers, significantly lower than estimates of 110K. Also, employment figures for June were revised sharply lower to 14K from 147K. The Unemployment Rate rose to 4.2%, as expected, from the prior release of 4.1%.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates in the September meeting has increased to 80.8% from 41.2% seen on Thursday, a day before the release of the NFP data.

Before the US employment data, traders pared Fed's interest rate cut bets for the September meeting significantly as Chairman Jerome Powell said in the press conference on Wednesday that there is no rush for interest rate cuts as the impact of tariffs announced by President Donald Trump has started feeding into the economy.

Gold technical analysis

Gold price bounces back above the 20-day Exponential Moving Average (EMA), which trades around $3,323. The overall trend of the Gold price remains sideways as it trades inside the Symmetrical Triangle formation, which indicates indecisiveness among market participants.

The 14-day Relative Strength Index (RSI) wobbles inside the 40.00-60.00, indicating a sharp volatility contraction.

Looking down, the Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245

Alternatively, the Gold price will enter uncharted territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart

 


Gold FAQs

Gold has played a key role in human's history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country's solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



Date

Created

 : 2025.08.04

Update

Last updated

 : 2025.08.04

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

EUR/GBP dips as traders reposition ahead of BoE interest rate decision

The Euro (EUR) edges lower against the British Pound (GBP) on Monday, with the Pound trading on a firmer footing across the board, as traders reposition ahead of the Bank of England's (BoE) monetary policy decision due Thursday, August 7.
New
update2025.08.04 22:31

Gold steadies as US Dollar stabilizes, dovish Fed bets rise after soft NFP report

Gold (XAU/USD) kicks off the week on a cautious note, trading flat on Monday, as the US Dollar (USD) stabilizes in the aftermath of Friday's disappointing Nonfarm Payrolls (NFP) report.
New
update2025.08.04 21:20

USD/CNH: Any decline might not be able to reach 7.1750 - UOB Group

US Dollar (USD) could edge lower against Chinese Yen (CNH), but any decline might not be able to reach 7.1750. In the longer run, USD appears to have moved into a 7.1600/7.2240 range trading phase, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.08.04 20:59

USD/JPY: Sharp drop in USD has scope to extend - UOB Group

Further US Dollar (USD) weakness seems likely against Japanese Yen (JPY); it remains to be seen whether it can reach 146.60. In the longer run, sharp drop in USD has scope to extend, but any decline may not break below 145.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.08.04 20:55

USD/CAD remains pinned below 1.3800 with hopes of Fed cuts limiting upside attempts

The Canadian Dollar keeps most of the ground it gained on Friday as the US Dollar Index fell about 0.8% as US employment data revealed that job growth increased much less than expected, and data from previous months was revised sharply lower.July's US Nonfarm Payrolls report crushed the view of a re
New
update2025.08.04 20:52

NZD/USD: Any advance is likely part of a higher range of 0.5885/0.5935 - UOB Group

Scope for New Zealand Dollar (NZD) to rise further, but any advance is likely part of a higher range of 0.5885/0.5935. In the longer run, slowdown in momentum indicates that the odds of NZD reaching 0.5845 are low, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.08.04 20:45

China: Playbook to reflate the economy - Standard Chartered

Protracted price decline in China has increased the risk of deflation mindset becoming entrenched. Policy makers have stepped up efforts to expand effective demand; zero rate and QE not on the agenda.
New
update2025.08.04 20:42

AUD/USD: Likely to trade in a sideways range of 0.6430/0.6495 - UOB Group

Australian Dollar (AUD) is likely to trade in a sideways range of 0.6430/0.6495. In the longer run, downward momentum is slowing; a breach of 0.6520 would indicate that AUD is not breaking below 0.6405.
New
update2025.08.04 20:39

USD recovery remains fragile as tariffs and economic risks mount - BBH

US Dollar (USD) and Treasury yields are steady just above Friday's lows while US equity futures point to a modest rebound. Any USD recovery looks fragile in our view, and the broader downtrend should reassert itself, BBH FX analysts report.
New
update2025.08.04 20:37

Global PMIs: July decline led by the US - Standard Chartered

Broad-based contraction across sectors in July; all sub-indices were lower than in June. Sharp decline in the US dragged down the aggregate amid reduced tariff-related inventory building.
New
update2025.08.04 20:34

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel