Gold prices regained ground and recovered on Friday, making up about half of Thursday’s 1.1% decline when it broke through and fell below the psychologically important $2,500 mark.

The upper end of the previous range at $2,480 acted as solid support and contained the decline. It also closed above the rising 10DMA, reinforcing the notion that a deeper decline was merely preparation for a fresh upward push.

The recent gains exceeded the $2,500 mark and the daily close above it signaled that the bulls had regained full control after a brief decline.

Daily studies are fully bullish, adding to this overall optimistic picture, as the yellow metal recently hit a series of new record highs, boosted by increasing expectations that the Fed will begin cutting interest rates in September, as well as geopolitical tensions and uncertainty about the economic outlook in the US.

All eyes are on Fed Chair Powell, who will speak at the central bankers’ symposium in Jackson Hole later today. He is widely expected to confirm signals for a September rate cut and provide further details on the extent and pace of monetary tightening.

A dovish stance that meets or exceeds expectations is likely to give the metal a new boost and push the price into uncharted territory again.

Breaking below the new all-time high ($2,531), exposing projections at $2,547, $2,564, and $2,590.

On the other hand, a surprise from Powell cannot be completely ruled out, as the Fed will have to consider several key factors before making the final cut (the timing and extent of a rate cut or no rate cut this time, the consequences of each decision for the economy, which is very vulnerable, and possibly a further slowdown caused by an inappropriate and unbalanced decision by the Fed).

In such a scenario, the price of gold would come under pressure again and would probably initiate a stronger correction.

Resolution: 2509; 2519; 2531; 2547.
Addition: 2486; 2480; 2470; 2451.