Gold prices appear to have found a solid base, with $4,000/oz increasingly looking like a key support level. Ongoing buying from Chinese investors at these prices, combined with a more benign US interest rate outlook, and a softer US dollar, has helped lift gold back towards its 50-day simple moving average at around $4,175/oz. This marks the first time the metal has approached this technical level in nearly three months, highlighting the improvement in market sentiment.
Looking ahead, further positive developments in US-Iraq relations could provide additional momentum, encouraging investors to push prices higher. As a result, the $4,175/oz level is likely to be tested several times in the near term. A sustained break above this level would be a constructive technical signal, opening the way for a move towards the mid-June high of just under $4,400/oz. While short-term volatility is likely to remain, gold is well positioned to extend its recent recovery if current market conditions persist.
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