XAU/USD stable above $2,500 and looking for new highs

XAU/USD Current Price: $2,506.95

• The Jackson Hole Symposium will host global decision makers through the end of the week.
• The US dollar extends its recent slide as bullish sentiment persists on Monday.
• XAU/USD pressures record highs with short-term bullish stance.

Gold is trading near a record high of $2,509.80 hit earlier in the week, helped by sluggish demand for US dollars. XAU/USD barely broke Friday’s high before pulling back, but buyers added to dips, helping the shiny metal hold the $2,500 mark. Positive equity tone is keeping the USD lower as Wall Street extends recent gains, while the absence of macroeconomic data caps the intraday range.

This week’s focus will be on the Jackson Hole Symposium, which hosts policymakers from around the world. The event will take place over the weekend, with Federal Reserve (Fed) Chairman Jerome Powell speaking on Friday.

Central banks are still the main driver of the market, with the focus on the Fed as the central bank is set to decide on an interest rate cut. Indeed, US policymakers have paved the way for such a move, but with the most cautious stance. Earlier Monday, Fed Bank of Minneapolis President Neel Kashkari spoke to the Wall Street Journal and said inflation is making progress, although the labor market is showing some worrisome signs. “The balance of risks has shifted more towards the labor market and the inflation side of our dual mandate,” Kashkari added.

Ahead of the event, S&P Global will release preliminary estimates of purchasing managers’ indices (PMIs) for August.

XAU/USD Short Term Technical Outlook

The XAU/USD pair is pushing a record high, and the daily chart shows that it is consolidating its recent gains. An intraday slide met buyers at the $2,385 price area, leading to a quick recovery, suggesting that speculative interest is willing to add to the downside. Technical indicators in the mentioned time frame have pulled back only modestly from the near overbought reading, but the pair is developing above bullish moving averages, with the 20 Simple Moving Average (SMA) providing dynamic support around $2,429.00.

In the short term, and according to the 4-hour chart, the risk is tilted to the upside. XAU/USD is trading well above all of its moving averages, which have taken bullish momentum well below the current level. At the same time, technical indicators resumed their advances after a modest downward correction, reflecting the dominance of the bulls.

Support levels: 2,496.40 2,485.10 2,427.20

Resistance levels: 2,510.00 2,523.50 2,535.00