Easing inflation and expectations for Fed interest rate cut support gold

XAUUSD quotes are testing the upper boundary of a triangle pattern, which may lead to a breakout. Find out more in our analysis dated 14 August 2024.

XAUUSD forecast: key trading points

• Annual producer inflation slowed to 2.2% in July, approaching the Federal Reserve 2% target
• New data on easing US inflation supported expectations for a significant September interest rate cut by the regulator
• Investors await the release of the US consumer price index data
• XAUUSD forecast for 14 August 2024: 2,480, 2,535, and 2,595

Fundamental analysis

Gold is slightly correcting on Wednesday but remains near record highs. New data showing easing US inflation have heightened expectations for a September Federal Reserve interest rate cut.

Annual producer inflation slowed to 2.2% in July, down from 2.7% in June, approaching the Fed’s 2.00% target. Today, investors await the release of the US consumer price index data to obtain inflation details. As part of the XAUUSD price forecast, weak consumer price index data may drive up gold prices.

Markets currently estimate the likelihood of a 50-basis-point interest rate cut in September at 50%. Lower interest rates make gold more attractive to investors as a safe-haven asset amid mounting geopolitical tensions.

XAUUSD technical analysis

Buyers continue to test the upper boundary of the triangle pattern. The XAUUSD analysis for today suggests that if the price secures above 2,480 USD, it may signal the beginning of the pattern implementation, with a target at 2,595. A rebound from the support line on the RSI indicator will be an additional signal for this scenario. The technical indicator readings are currently testing the resistance level, so there is a risk of a bearish correction towards 2,450 before a further rise. If the price secures below 2,435, this could be a pessimistic scenario for bulls, indicating a breakout of the channel’s lower boundary and a decline towards the lower boundary of the triangle pattern.

Summary

Easing US inflation and expectations for a Federal Reserve interest rate cut support gold. XAUUSD forecast for 14 August 2024 suggests that a potential breakout above the upper boundary of the triangle pattern and weak consumer price index data may drive XAUUSD price up to 2,595 USD.