Forecasting the USD Exchange rate is an extremely necessary factor to help investors more easily make trading decisions. So will the XAUUSD trend grow or decline sharply during this time? In this article, let’s look at the data with Learn Forex Trading and make some important predictions for traders about this year’s gold exchange rate. Surely when reading the above article, you will find out what your next direction is.
What is the USD Exchange rate in Forex trading?
To be able to predict XAUUSD accurately, you first need to understand what the USD Exchange rate in Forex means. It is the exchange rate between gold and the US dollar. In particular, XAU is the abbreviation for gold according to international standards. At the same time, USD is the abbreviation code for the currency of the United States. You can understand the XAUUSD exchange rate as representing the number of US Dollars needed to buy 1 ounce of gold.
In particular, the exchange rate of gold and the US Dollar is quoted with 2 decimal places. And the value of 1 gold pip will be equal to 0.1 USD. For example, XAUUSD exchange rate = 1933.97 means 1 ounce of gold will equal 1933.97 USD. If gold increases to 1934.07, that means an increase of 1 pip equals 0.1 USD.
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What is the current price of XAUUSD?
According to statistics updated on January 28, 2024, the current XAUUSD price is 2017.09. Thus, it can be seen that the price of XAUUSD directly from gold to US Dollar decreased -0.18%. Based on technical analysis indicators, experts recommend an order in the 1h time frame as a “Strong Sell”. And giving incentive for a 1-day time frame is also a “Strong Sell”.
XAUUSD exchange rate forecast this year
According to the update, gold prices have reached a peak in the past seven months at about 2,050 USD. Accordingly, economists at Commerzbank analyzed the outlook and said that there is little upside potential for gold. Therefore, in the coming months, Commerzbank expects the USD Exchange rate to weaken if expectations for interest rate cuts for the first half of 2024 decrease. However, Commerzbank believes that the FED will significantly lower interest rates by the end of next year, about 100 bps. So, the XAUUSD price could then rebound and climb to as high as $2,100.
Factors affecting the prediction of future XAUUSD and USD Exchange rate
Normally gold is a popular asset for long-term investments. If invested short-term, XAUUSD will be highly volatile, and sensitive to any changes in the global economy. Therefore, to make the right decision when trading, traders need to predict XAUUSD most accurately. However, to make predictions, traders need to clearly understand the factors that affect the USD Exchange rate :
Macroeconomic statistical data
Based on statistical data such as GDP, supply and demand, interest rates… Investors will analyze whether the economy is trending toward decline or positive growth. Because a strong economy and stable growth rate can increase the value of currency and decrease the value of gold, leading to the exchange rate of XAUUSD also decreasing. Conversely, slow economic growth can increase the value and exchange rate of gold.
Inflation in the United States causes the XAUUSD trend to increase rapidly
The second factor that could affect the XAUUSD price prediction is US inflation. But the impact of this factor is insignificant. If the FED controls inflation within a narrow range of 2%, gold prices will not be affected. However, by 2022 the level of inflation in the United States will increase to 8%. This greatly affects the currency and can push up gold prices.
FED changes discount rate affecting XAUUSD price
A change in the US Federal Reserve’s discount rate could also impact the price of XAUUSD. The discount rate is the interest rate at which commercial banks can borrow capital from the FED. Therefore, when the FED increases interest rates, it will directly affect the USD Exchange rate. In particular, the XAUUSD trend will decrease if interest rates affect the USD. Or the price of XAUUSD falls if the discount rate impacts gold demand.
Investing XAUUSD volume by trader
The final factor disrupting traders’ XAUUSD predictions is Investing XAUUSD volume. When traders make large purchases or sales, it can create a short-term impact on the price of gold (especially in low-liquidity markets). Buying large amounts of XAUUSD can create an increase in the price of gold, and similarly selling large amounts can also cause a decrease in the price of gold.
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Effective methods for forecasting USD Exchange rate
Besides understanding the factors that can affect the USD Exchange rate. Traders need to know how to apply methods to make the most accurate forecasts. In particular, tools and means that can be used to make predictions include:
- Basic means of technical analysis: Traders can analyze based on medium and long-term time frames. Combine with a few basic technical indicators for more accurate results.
- Chart analysis: This activity includes evaluating support and resistance levels… As well as patterns formed based on different time frames.
- Statistical tools: This is considered one of the most important tools to help traders evaluate the probability of a fundamental factor. To see how it affects the price and give the nature and intensity of its impact.
- Apply mathematical and statistical analysis methods: Use additional modeling and adaptive forecasting methods to produce results.
- Expert opinion: In addition, you cannot miss analytical information from experts. Refer to some consensus forecasts to increase the certainty of your forecast.
summary
In short, when making forecasts about the USD Exchange rate, traders need to pay attention to the fluctuations of factors. At the same time, consider the risks to make the right investment decision. Hopefully, through the above article, Learn Forex Trading will partly help investors better understand XAUUSD as well as know how to apply methods to make accurate forecasts. If you still want to know more about related issues such as Euro USD Exchange rate, EUR/JPY… then please look forward to the next article on our website.
FAQs:
What is the XAUUSD exchange rate? What is the current price of XAUUSD?
XAUUSD is the exchange rate between gold and the US Dollar currency. Currently, the price of XAUUSD is 2017.09.
What risks are there when trading gold on CFDs?
If the XAUUSD trend forecast is wrong, investors’ assets can suffer losses and be depleted quickly.
Is trading XAUUSD suitable for newbies?
Are not! Because the complexity of short-term forecasts and high volatility will cause transactions to fail. Therefore, this asset class is often more suitable for professional traders.
