Gold prices rise as the US dollar declines again. Due to the weakening of the US dollar, gold prices have gained ground since Monday.

Gold price increases. After finding technical support at the bottom limit of an ascending channel

Gold prices (XAUUSD) recovered on Tuesday after a lackluster start to the week. Helped by a guarded mood and, especially, a lower U.S. dollar, which enhances the demand for gold by making it more accessible to foreign purchasers.

Despite its already considerable gain in 2023, gold still has a positive outlook in the medium term. Regardless of the difficulty in predicting day-to-day changes. XAUUSD has increased by more than 10% this year. Bursting through each technical barrier that stood in its way and coming dangerously close to regaining its previous all-time high.

Gold is aided by speculations that Fed will restore to easing policy

Looking ahead, the Fed’s impending end to its tightening program should be viewed as a bullish driver for bullion. Rates usually start to decline throughout the Treasury curve once the Fed announces its final rate increase of the cycle and then pauses. This can favor investments with no yield.

The weakening state of the American economy is another possible positive factor. Despite the strong business, the prognosis is still difficult and incredibly unclear. Particularly in light of the instability in the financial sector last month.

Technical Outlook of Gold

The Fed’s imminent end to its tightening policy should be seen as a favorable factor for bullion in the future. After the Fed declares its final rate rise of the cycle and then stops. Rates typically begin to drop over the whole Treasury curve. This may benefit non-yielding assets.

Another potential plus is the deteriorating situation of the American economy. With the robust business, the outlook is still challenging and exceedingly vague. Especially in the context of the financial sector’s unpredictability this past month.

Technical Summary