This situation kept gold, silver, platinum (XPL) and palladium (XPD) prices lower. But when oil prices failed to break above $120 and then dropped, precious metals prices rebounded from the long-term support. If oil prices continue to trade lower towards $80, then precious metals may continue to rise.
The drop in oil prices eases inflation fears and reduces the pressure on the Federal Reserve to raise interest rates. This is significant for gold as higher rates are negative for non-yielding assets. The gold price tends to see more buying when rate cut expectations rise and the US dollar weakens.
Gold Price Forecast: Rebound Depends on $4,900 Breakout
XAUUSD Holds Key Range Between $4,500 and $4,900
From a technical perspective, the spot gold price is consolidating at the edge of the ascending broadening wedge pattern above the $4,500 region. A break below $4,500 will push the price towards the 200-day SMA at around $4,380. However, a break below $4,380 will likely take the price towards $4,000.
