The actions of the Federal Reserve (Fed) which implemented interest rate cuts for the first time in more than 4 years had a significant impact on the price of gold , seeing it strengthen against the US dollar last week.
The significant effect is due to the Fed tending to cut 50 basis points compared to 25 basis points which is considered aggressive by investors, driving the decline for the US dollar.
This week, there are several series of data that will be the focus for investors and also influence gold such as the United States (US) manufacturing and services PMI, US GDP, the PCE index and the speech from Fed chairman Jerome Powell.
Investors are expected to look forward to Powell's speech to analyze whether the speech is 'dovish' or 'hawkish' in order to get an indication of interest rates for the upcoming meeting.
On the XAU/USD chart which measures the value of gold against the US dollar, last Friday the price made an increase to a height of 2625.00 creating the latest historical record.
For the current price movement today (Monday), the slow rise in price is seen to continue reaching a recent high of 2630.00 before retreating slightly in the European session.
Analysts expect the price of gold is likely to reach the zone between 2670.00 and 2700.00 to continue setting new records this week.
If the price does not manage to continue the momentum (bullish), investors will be on the lookout for signs of falling prices again.
A drop below the 2600.00 level will trigger expectations for the gold price bearish trend movement to start again.
The focus on further declines is on some important levels of the previous weeks such as 2530.00, 2500.00 and 2470.00.
See the XAU/USD price chart image below for your technical analysis reference.
