Gold stalls as USD strength weighs amid mixed drivers
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Overview Gold prices ($XAU/USD) continue to trade in a consolidative range, grappling with mixed fundamental cues. A modest recovery in U.S. Treasury yields and USD strength, driven by President Trump’s tariff announcements, weigh on the precious metal. However, bets on Federal Reserve rate cuts and inflationary concerns stemming from trade policy provide support.
Key Drivers Gold prices remain sensitive to conflicting factors.
The U.S. Dollar Index (DXY) rebounded to 107.89, supported by rising U.S. Treasury yields, which moved off their one-month low at 4.561%. Trump's tariff threats on key industries, including pharmaceuticals and computer chips, reignite inflationary fears, partially offsetting USD gains. Market pricing for two 25 bps Fed rate cuts this year moderates upside for the USD, keeping gold supported near $2,730. Investors await the FOMC decision on Wednesday, which could shape gold’s directional bias. Technical Analysis Gold exhibits resilience near critical Fibonacci retracement levels and recent breakout zones.
Support Levels $2,725-$2,720 serves as key resistance-turned-support.
$2,707-$2,705 corresponds to the 38.2% Fibonacci retracement.
$2,684 represents the 50% retracement level and an additional downside target if losses deepen.
Resistance Levels Immediate resistance at $2,755-$2,757.
A break above $2,772-$2,773 could open the path to $2,786 and $2,790, representing October highs and all-time peaks.
A sustained move beyond $2,800 would confirm bullish momentum and signal continuation of the uptrend.
Outlook Gold prices are poised for volatility as traders digest economic data and Trump’s aggressive trade policies. A stronger USD and rising yields may cap gains in the short term, but inflationary pressures and Fed rate cut expectations could keep gold in demand as a hedge. A decisive break above $2,800 would likely attract fresh buying interest. Conversely, failure to hold $2,720 could trigger further downside toward $2,684.
Strategy
Bullish traders could look for entries above $2,755, targeting $2,790 with stops below $2,720. Bearish positions may be considered on a break below $2,720, aiming for $2,684 with stops above $2,755. Stay cautious ahead of the FOMC meeting, as policy signals will be critical in shaping market sentiment.
Key Drivers Gold prices remain sensitive to conflicting factors.
The U.S. Dollar Index (DXY) rebounded to 107.89, supported by rising U.S. Treasury yields, which moved off their one-month low at 4.561%. Trump's tariff threats on key industries, including pharmaceuticals and computer chips, reignite inflationary fears, partially offsetting USD gains. Market pricing for two 25 bps Fed rate cuts this year moderates upside for the USD, keeping gold supported near $2,730. Investors await the FOMC decision on Wednesday, which could shape gold’s directional bias. Technical Analysis Gold exhibits resilience near critical Fibonacci retracement levels and recent breakout zones.
Support Levels $2,725-$2,720 serves as key resistance-turned-support.
$2,707-$2,705 corresponds to the 38.2% Fibonacci retracement.
$2,684 represents the 50% retracement level and an additional downside target if losses deepen.
Resistance Levels Immediate resistance at $2,755-$2,757.
A break above $2,772-$2,773 could open the path to $2,786 and $2,790, representing October highs and all-time peaks.
A sustained move beyond $2,800 would confirm bullish momentum and signal continuation of the uptrend.
Outlook Gold prices are poised for volatility as traders digest economic data and Trump’s aggressive trade policies. A stronger USD and rising yields may cap gains in the short term, but inflationary pressures and Fed rate cut expectations could keep gold in demand as a hedge. A decisive break above $2,800 would likely attract fresh buying interest. Conversely, failure to hold $2,720 could trigger further downside toward $2,684.
Strategy
Bullish traders could look for entries above $2,755, targeting $2,790 with stops below $2,720. Bearish positions may be considered on a break below $2,720, aiming for $2,684 with stops above $2,755. Stay cautious ahead of the FOMC meeting, as policy signals will be critical in shaping market sentiment.