Gold Price Forecast: XAU/USD testing three-month highs near $4,600 as the US Dollar dives

Gold (XAU/USD) is testing three-month highs near $4,600 as the US Dollar weakens following the US Treasury's plan to increase liquidity to repurchase long-term securities. Analysts from Rabobank note that while lower Treasury yields typically weaken the currency, this situation is different, with gold and crypto also rallying, indicating concerns about fiscal credibility and borrowing costs.

The precious metal, currently trading at $4,582, shows a bullish near-term bias, though the RSI is approaching overbought levels. It has broken above the 200-day Simple Moving Average (SMA), but the MACD remains positive, hinting at potential buying opportunities during dips. Bulls are targeting the $4,590 horizontal cap, followed by the $4,700 psychological level and May's high of $4,477.3.

A drop below the 200-day SMA, at $4,514, could expose the previous top near $4,450 and the August 14 low near $4,310. Historically, gold has served as a store of value, medium of exchange, and a safe-haven asset, often seen as a hedge against inflation and currency depreciation. Central banks, diversifying their reserves to strengthen their economies, have significantly increased their gold holdings in recent years.