XAU/USD aims for new highs

XAU/USD Current Price: $2,527.99

• Upbeat US Gross Domestic Product figures undermine market sentiment.
• Investors await US PCE inflation numbers, the Federal Reserve’s preferred inflation gauge.
• XAU/USD has resumed its advance and aims to extend gains beyond the record high of $2,531.60.

Spot Gold continues to trade at familiar levels, confined to a horizontal channel defined by the all-time high at $2,513.99 and this week’s low at $2,493.49. XAU/USD is finding buyers on the downside and is currently at $2,528 as Wall Street’s bullish tone weighs on the US dollar. United States (US) indices reversed losses at each open and made solid gains after the release of encouraging US data.

The US released its second estimate of Q2 Gross Domestic Product (GDP), revised upwards to 3% from the initial estimate of 2.8%. In addition, initial jobless claims for the week ended Aug. 23 fell to 231,000, beating expectations. Resilient economic growth, despite the Federal Reserve (Fed) keeping interest rates near record levels, boosted sentiment.

Stock markets were under pressure in the first half of the day as NVIDIA released its second quarter earnings report. Earnings were upbeat, but the outlook failed to impress, sending shares down about 7% after Wednesday’s close and dragging the tech sector lower. The rally began during European trading hours, extending into the American session.

Investors are now awaiting US inflation data. The country will release July’s Personal Consumer Expenditure (PCE) Price Index, which is expected to have risen 0.2% on the month of the year and 2.6% on the year, up from June’s figures.

XAU/USD Short Term Technical Outlook

Technically, the daily chart for the XAU/USD pair shows that the bulls have regained control and are aiming to challenge the aforementioned all-time high. Technical indicators have risen to positive levels and remain below their weekly highs, suggesting there is room to extend the current lead. At the same time, gold is developing above all moving averages, with a 20-of-20 simple moving average (SMA) slowly edging into the $2,470 region. The 100 and 200 SMAs, meanwhile, maintain their bullish slopes well below the shortest.

Risk is tilted to the upside in the short term, although momentum is limited. On the 4-hour chart, XAU/USD has bounced back above a flat 20 SMA, although the 100 and 200 SMAs are heading firmly north below the current level. Finally, the technical indicators stabilized well above the median lines, lacking clear directional strength.

Support levels: 2,516.70 2,508.80 2,496.40

Resistance levels: 2,531.60 2,542.00 2,555.00