XAU/USD keeps sight of $4,700 ahead of Fed Warsh’s speech

• Gold attempts another run toward 15-week highs just shy of $4,700 early Thursday.
• US Dollar fades post-PCE inflation uptick amid broader market optimism, ahead of Warsh’s speech.
• On the daily chart, an impending Bull Cross suggests a fresh upside for Gold in the near term.

Gold is making another run to retest 15-week highs of $4,697 early Thursday. Gold traders are taking advantage of an upbeat mood-led US Dollar (USD) retreat, looking past hot US core Personal Consumption Expenditures (PCE) Price Index data for July.

Renewed USD weakness offers the much-needed boost to Gold, following Wednesday’s pullback from near the $4,675 neighbourhood.

Fading hopes of an interest rate hike by the US Federal Reserve (Fed) at its September 16.-17 monetary policy decision act as a headwind to any recovery attempts in the Greenback, even though the buck witnessed a temporary rebound following hotter-than-expected headline PCE inflation readings for July.

The headline PCE Price Index increased a seasonally adjusted 0.2% for the month, putting the annual inflation rate at 3.7%, the Commerce Department reported Wednesday. The market forecast was for 0.1% and 3.6%, respectively. Meanwhile, core PCE posted gains of 0.2% and 3.3%, in line with forecasts.

The CME Group’s FedWatch Tool continues to show an over 60% probability that the Fed will keep rates on hold next month, with market expectations little changed post-PCE release.

Additionally, renewed optimism surrounding the reopening of the Strait of Hormuz, falling Oil prices and an upbeat earnings report from the Artificial Intelligence (AI) pioneer, Nvidia, undermine the USD’s safe-haven appeal.

Bloomberg reported late Wednesday that the Islamic Revolutionary Guard Corps (IRGC) reached a revenue-sharing agreement with Oman on the Strait of Hormuz, despite the ongoing standoff between Tehran over control of the crucial waterway.

Meanwhile, Nvidia reported that its quarterly revenue more than doubled and forecast third-quarter revenue above Wall Street estimates.

Looking ahead, if risk sentiment remains solid, Gold will likely stretch further north at the expense of the Greenback. The upcoming US Jobless Claims data will entertain traders in the absence of high-impact economic releases and as they gear up for Friday’s Fed Chair Kevin Warsh’s speech at the annual Jackson Hole Symposium.

In the daily chart, XAU/USD trades at $4,636.90. The metal holds well above the key simple moving averages (SMAs), with the 200-day SMA at $4,525.40 and the 21-day and 100-day SMAs clustered just below $4,380, reinforcing a bullish near-term bias as price extends away from its medium-term trend base. The Relative Strength Index (14) at 68.21 hovers near overbought territory, suggesting strong but somewhat stretched upside momentum.

Additionally, backing the bullish scenario, the 21-day SMA is awaiting a daily close above the 100-day SMA to confirm a Bull Cross.

On the downside, initial support emerges at the 200-day SMA near $4,525.40, while a secondary, denser demand zone is seen around the 21-day and 100-day SMAs at $4,378.11 and $4,376.74, ahead of the 50-day SMA at $4,201.18. As long as XAU/USD stays above these layers of trend support, the path of least resistance would likely remain to the upside, although the elevated RSI hints that any further gains could be vulnerable to a corrective pullback toward the $4,525 area.