The European Central Bank (ECB) will also announce its latest interest rate decision on Thursday, which could further influence market dynamics. A quarter-point rate cut would likely lower the main refinancing rate to 3.15%. This decision could weigh on the euro, increasing downward pressure on the EUR/USD. A weaker euro often translates into a stronger dollar, causing gold and silver to rise. However, if the ECB is surprised with a more cautious approach to rate cuts, it could strengthen the euro and indirectly support precious metals through the depreciation of the dollar.
Gold (XAU) Technical Analysis
Gold Daily Chart – Bullish Momentum
The daily chart for gold shows strong price action after nine days of consolidation and continues to move higher. The price has closed above the 50-day SMA while the RSI has closed above the midline, indicating bullish price action. The strong recovery from the crucial support at $2,550, marked by the red dotted trendline, indicates a positive development. The immediate resistance is at $2,720, followed by $2,790.