FX.co ★ XAU/USD. Analysis and Forecast

Gold continues to reach new all-time highs. The demand for haven assets, driven by the risk of further geopolitical tensions and uncertainties surrounding the U.S. presidential elections, remains a key factor supporting the precious metal.

Additionally, the drop in U.S. Treasury yields is keeping dollar bulls defensively positioned below the three-month high set on Tuesday, providing further support for gold. However, growing expectations that the Federal Reserve will proceed with limited rate cuts due to a stable economy prevent bulls from opening new long positions in gold. This is confirmed by the RSI (Relative Strength Index), which shows mild overbought conditions.

Traders are advised to wait for key U.S. macroeconomic releases that could provide new signals on the Fed's interest rate outlook, potentially offering a significant catalyst for XAU/USD.

Despite this, the fundamental backdrop still favors the bulls, suggesting that any meaningful corrective decline could be viewed as a buying opportunity.

From a technical perspective, breaking through the weekly trading range to establish a new all-time high is seen as a new trigger for bulls. The subsequent upward movement could lift gold prices to resistance at the ascending trend line stretching from early July, around the $2,783-2,785 level, now acting as a strong barrier given the slightly overbought RSI on the daily chart. Should gold hold firm above this barrier, XAU/USD could reach the $2,800 level.

On the other hand, a corrective decline would find strong support near the breakout point of the trading range, around $2,750. Further selling could make gold vulnerable to a drop to intermediate support at $2,730, with a path toward $2,715. Below that, the key $2,700 level may open the way to the next significant support zone around $2,675, potentially moving down to $2,655, shifting the trend in favor of the bears.