On Monday morning (August 26th) in the Asian market, spot gold continued the upward trend of the previous trading day, with the current gold price around $2516 per ounce. Renowned financial website FXDailyReport analyst Nicholas Kitonyi wrote an article analyzing the future trend of gold.

Kitonyi stated that last Friday, gold prices rebounded from the trend line support level of around $2488 per ounce to around $2510 per ounce. In the 60 minute chart, gold trades within an upward channel.

Kitonyi added that the price of gold has now risen slightly above the 100 hour moving average. Therefore, gold is on the brink of entering the overbought level of the 14 hour Relative Strength Index (RSI).

Stimulated by dovish remarks from Federal Reserve Chairman Powell, spot gold surged nearly $27 last Friday, closing above $2510 per ounce. Powell said that the time for policy adjustment has arrived, implying that interest rate cuts are imminent. Analysts say Powell has sent the strongest signal of interest rate cuts so far.

Powell said, "The time for policy adjustment has come. Confidence in inflation moving towards 2% has increased. We do not seek or welcome further cooling in the labor market. We will make every effort to support the labor market to remain strong, while making further progress in achieving price stability; the level of policy interest rates provides ample space to address risks, including further adverse weakness in the labor market

Spot gold closed up $26.77, or 1.07%, at $2511.51 per ounce last Friday.

Due to the expectation that the Federal Reserve will lower interest rates earlier and more significantly to boost the economy, fund managers' bullish bets on gold have jumped to their highest level in over four years.

The weekly data released by the US government last Friday showed that as of August 20th, hedge funds and other large speculators' net long positions in gold increased by 7.8% to 236749 contracts, the highest level since early 2020.

Adam Button, head of currency strategy at Forexlive.com, said that as interest rates fall and the US dollar falls, gold prices will continue to shine. He said, "It seems that the market has not yet reached its peak

Phillip Streible, Chief Market Strategist at Blue Line Futures, said he may expect gold prices to rise to $2600 per ounce before there is more sustained selling pressure and profit taking in the market.

Two pictures to see the prospects of gold technology

In terms of short-term trends, Kitonyi stated that from a technical perspective, according to the 60 minute chart of gold, the price of gold is trading within an upward channel. The 14 hour Relative Strength Index (RSI) also rebounded, approaching overbought levels.

Therefore, gold bulls will seek to continue the current rebound trend of gold prices and rise towards $2547 per ounce, or higher at $2579 per ounce.

On the other hand, gold bears will seek to take profits when the gold price falls back to $2488/ounce or lower at $2470/ounce.

1-hour chart of spot gold

Kitonyi pointed out that the daily chart shows that gold prices are trading in an upward channel. On the 14th, RSI also supported a long-term bullish trend as it approached an overbought state.

Therefore, gold bulls will set their long-term profit target at around $2579 per ounce, or even higher at $2652 per ounce.

On the other hand, bears will seek profit taking when gold prices fall to around $2432 per ounce, or even lower at $2359 per ounce.

Daily chart of spot gold