Gold Rises On Dollar Weakness

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Gold Rises On Dollar Weakness

Gold (Xau/Usd) Rises On Dollar Weakness

Gold (XAU/USD) has edged higher and gained more than 1% during Friday's session. This development comes as the bond yields and the US Dollar have dived lower on dovish remarks from Jerome Powell.

According to Powell, he is confident that inflation will eventually move lower towards the goal of 2%. He also made it clear that now is the time to cut rates as the labor market is now under distress.

Gold (Xau/Usd) Turns $2500 Into Support

As of now, Gold (XAU/USD) is trading around $2510 and has successfully turned the $2500 level into support. It is worth mentioning that Gold (XAU/USD) moved higher from its lows near $2484 following the Powell comments.

The Powell comments revolved around how the inflation is now moving lower and will touch the 2% target. He also talked about how the Fed's target has now moved towards improving the labor market.

These comments enabled the Gold (XAU/USD) to move back above the $2500 support. Meanwhile, the US Dollar has extended its losses against the Gold and even fiat currencies. The DXY also lost 0.82% of its value against the 6 currencies and was last seen near 100.68.

The US bond yields also tumbled with the 10-year bond yields now hovering around 3.80%. Now, a lot more traders are looking forward to a 50 basis points rate cut at the next meeting.

As the Fed's focus has now shifted to the labor market, the upcoming NFP report will become a key catalyst for the Gold (XAU/USD) & other FX currencies.

If the recent uptrend in Gold (XAU/USD) holds, the next target to watch will be $2531. If that level is achieved, it will be an all-time high for Gold and will mean uncharted waters.

However, if the Gold (XAU/USD) traders lose the $2500 handle, it will mean a revisit to the $2483 support level. It is also important to note that the 50 SMA is hovering around $2400, making it an important support level.

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