Gold steady amid rate cut hopes, geopolitical tensions
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Gold prices have seen three consecutive days of gains, approaching multi-month highs amid global risk aversion and Federal Reserve rate-cut expectations. While the precious metal retreated slightly from $2,758-$2,759 during Wednesday’s European session, its bullish outlook remains intact, supported by dovish Fed sentiment and persistent geopolitical concerns.
Market drivers favoring gold’s upside
The Federal Reserve’s potential decision to implement two rate cuts this year has bolstered demand for gold. Lower yields on U.S. Treasury bonds and a softer U.S. dollar provide additional tailwinds for the non-yielding asset.
Compounding the bullish case, U.S. President Donald Trump’s recent tariff threats against Canada and Mexico have reignited fears of a global trade war, prompting investors to seek safe-haven assets like gold. Moreover, hopes for progress in diplomatic talks, including easing sanctions on Russia in exchange for peace in Ukraine, further contribute to gold's appeal during uncertain times.
Key technical levels for gold
From a technical perspective, the breakout above the $2,720 supply zone signals strong bullish momentum. Oscillators remain in positive territory, suggesting room for further gains. A decisive break above $2,750 could pave the way for gold to test its all-time high near $2,790, last achieved in October 2024.
Conversely, any pullback is likely to find strong support around the $2,725-$2,720 range. If this level holds, it would present a potential buying opportunity for traders targeting higher price levels. A breach below $2,690, however, could invite a sharper correction towards $2,625, which aligns with the 100-day EMA and a key ascending trendline.
Upcoming events to watch
This week’s market focus will shift to the Bank of Japan’s policy decision on Friday, which could impact gold through currency and bond market volatility. Additionally, flash PMI prints from major economies are expected to provide fresh insights into global economic conditions and further influence gold's trajectory.
As traders continue to balance geopolitical risks with central bank actions, gold remains a crucial barometer for global market sentiment, offering a robust hedge against uncertainty.
Market drivers favoring gold’s upside
The Federal Reserve’s potential decision to implement two rate cuts this year has bolstered demand for gold. Lower yields on U.S. Treasury bonds and a softer U.S. dollar provide additional tailwinds for the non-yielding asset.
Compounding the bullish case, U.S. President Donald Trump’s recent tariff threats against Canada and Mexico have reignited fears of a global trade war, prompting investors to seek safe-haven assets like gold. Moreover, hopes for progress in diplomatic talks, including easing sanctions on Russia in exchange for peace in Ukraine, further contribute to gold's appeal during uncertain times.
Key technical levels for gold
From a technical perspective, the breakout above the $2,720 supply zone signals strong bullish momentum. Oscillators remain in positive territory, suggesting room for further gains. A decisive break above $2,750 could pave the way for gold to test its all-time high near $2,790, last achieved in October 2024.
Conversely, any pullback is likely to find strong support around the $2,725-$2,720 range. If this level holds, it would present a potential buying opportunity for traders targeting higher price levels. A breach below $2,690, however, could invite a sharper correction towards $2,625, which aligns with the 100-day EMA and a key ascending trendline.
Upcoming events to watch
This week’s market focus will shift to the Bank of Japan’s policy decision on Friday, which could impact gold through currency and bond market volatility. Additionally, flash PMI prints from major economies are expected to provide fresh insights into global economic conditions and further influence gold's trajectory.
As traders continue to balance geopolitical risks with central bank actions, gold remains a crucial barometer for global market sentiment, offering a robust hedge against uncertainty.