Gold Price Forecast: Gold/USD Hits Record High

XAU/USD Current Price: $2,675.01

Amid scarce macroeconomic data, market sentiment led the charge on Wednesday.

Focus shifts to the ECB's monetary policy decision on Thursday.

XAU/USD aims to set a new historical high and challenge the $2,700 mark.

Safe-haven sentiment continues to drive gold demand, with the shiny metal hovering around historical highs on Wednesday. Despite the US dollar strengthening against other major currencies, XAU/USD reached a peak of $2,685.25 on Wednesday. The latter gained additional strength after the US opening, causing XAU/USD to retreat from the aforementioned high but still maintaining a slight intraday increase.

Market sentiment was low in the first half of the day, with Asian and European indices edging lower following weaker-than-expected earnings reports from the Old Continent. However, Wall Street managed to reverse this sentiment, as all three major indices were in the green.

Given the absence of first-tier macroeconomic data this week, speculators have been eyeing developments in the Middle East and China for guidance, but headlines from these areas have also been scarce. On one hand, the missile bombardment between Israel and Iran continues, with concerns that the attacks could reach nuclear power plants or oil factories. On the other hand, the Chinese government has been bluffing about stimulus measures to revive the economy but has failed to provide sufficient details on the matter.

If anything, the ECB may trigger some action on Thursday, as the central bank will announce its monetary policy decision. The market widely expects the ECB to cut rates for the third consecutive time. With economic progress slowing down, it is anticipated that the main refinancing operations rate and the deposit facility rate will each decrease by 25 basis points (bps).

XAU/USD Short-Term Technical OutlookFrom a technical perspective, the XAU/USD currency pair is poised to extend its uptrend and challenge the $2,700 mark. On the daily chart, the pair has risen for the second consecutive day, with the bullish 20 Simple Moving Average (SMA) providing dynamic support near $2,644.10. In the same chart, the longer moving averages also maintain their bullish slope well below the shorter moving averages, reflecting a long-term positive stance. Finally, the momentum indicator has flattened near its 100 line, while the Relative Strength Index (RSI) continues to rise, currently around 64, consistent with the dominance of the bulls.

In the short term, according to the 4-hour chart, the risks are skewed to the upside. The bullish 20 SMA is above its 100 SMA, and the 200 SMA is advancing below the shorter SMAs, which is typically understood as increasing momentum. Meanwhile, the technical indicators have resumed their upward trend within positive levels after a minor corrective decline.

Support levels: $2,668.80, $2,655.65, $2,644.10

Resistance levels: $2,685.45, $2,700.00, $2,715.00