Gold prices (XAU/USD) are trading near the lower end of a recent trading range, influenced by a combination of factors, including disappointment over China’s fiscal stimulus, reduced expectations for Fed rate cuts, and geopolitical tensions.
Key Factors:
- China’s Fiscal Stimulus: The limited extent of China’s fiscal stimulus has weighed on gold prices, as China is a major consumer of the precious metal.
- Fed Rate Expectations: The probability of a larger Fed rate cut in November has declined, reducing the attractiveness of gold as a non-interest-bearing asset.
- Geopolitical Risks: The ongoing tensions between Israel and Iran continue to support the safe-haven appeal of gold.
Technical Analysis:
- Sideways Trading: Gold is currently consolidating in a narrow range between $2,630 and $2,670.
- Support Levels: A break below $2,632 could lead to further declines, with potential support at $2,625 and $2,600.
- Upside Potential: A break above $2,673 could signal a resumption of the uptrend, with a potential target at $2,700.
Overall Outlook:
Gold prices are likely to remain volatile, influenced by geopolitical developments, economic factors, and market sentiment. Traders should monitor technical indicators for signs of a trend reversal.
