GLD ETF stock price forecast as gold rebounds

The SPDR Gold Trust, also known as the GLD gold ETF, remains within a tight range as the market digests Jerome Powell’s hint of a September rate cut on Friday. Expectations of a dovish Fed, coupled with concerns over the central bank’s independence within Trump’s administration, are supporting the bullion and its derivatives. Besides, the persistent tensions between Russia and Ukraine have held GLD gold price above the support zone of $305. 

However, a risk-on mood and stronger US dollar are limiting the asset’s upside potential. At the time of writing, GLD was trading at $309.83 as gold price retreated slightly from the two-week high hit earlier on Tuesday. 

Risk-on mood eases gold safe haven demand

Gold price hit a two-week high early on Tuesday even as the risk-on mood curbed its gains. As the market digest Jerome Powell’s tilt towards an interest rate cut in September, the fear and greed index remains on the greed end of the spectrum at a reading of 59. 

On the one hand, an environment of lower interest rates tends to favor the non-yielding bullion. However, the expectations of a dovish Fed have also increased flows to more risk-driven assets like stocks; capping gold price movements on the upside.  

While the Dow Jones Industrial Index has retreated from the record-high reached on Friday, it is on track to record its fourth straight month of gains. S&P 500 and NASDAQ are also on pace to hit the 4th and 5th monthly gain respectively. This upward momentum has supported the US dollar while weighing on precious metals and other safe-haven assets.

Nonetheless, GLD gold price will likely remain steady above the support zone of $305 as tensions between Russia and Ukraine persist. While marking the country’s 34th independence day on Sunday, the Ukranian President said that the nation will continue to fight for its freedom. He stated, “We need a just peace, a peace where our future will be decided only by us…Ukraine has not yet won, but it has certainly not lost.” 

The defiant address comes at a time when Russia has accused Ukraine of attacking its power facilities. Moscow has blamed drone attacks for the fire witnessed at a nuclear power plant in western Kursk. 

In addition to these geopolitical tensions, gold investors will also be digesting President Trump’s move to fire Fed Governor Lisa Cook. This is in addition to the CB consumer confidence data on Tuesday and the preliminary readings of the US GDP and PCE index on Thursday. The economic figures will offer cues on the health of the US economy vis-a-vis the Fed’s path to easing its monetary policy. Signs of a resilient economy may limit gold’s price gains.    

GLD gold price technical analysis

GLD gold price has retreated slightly, even as the US rate cut cheer sustains the bullion above the support zone of $3350. At the time of writing, the ETF was trading at $309.83 after pulling back from the two-week high it hit at the start of the week. 

A look at its daily price chart shows the asset still trading above the 25 and 50-day EMAs. While these indicators support an uptrend, its RSI of 52 hint at the continuation of the months-long tight-range trading. 

In the short term, the range between the 50-day EMA at $306 and the resistance level of $311 will be worth watching. A move above the range’s upper limit will likely curb the gains at $313. However, this thesis will be invalidated by a pullback past the lower support zone of $305.