Gold targets higher levels amid bond yield weakness and trade tensions
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Gold (XAU/USD) maintains a bullish bias, consolidating within its weekly range and trading above $2,765 in early European trade. The decline in US Treasury yields continues to support the non-yielding metal, while concerns over US President Donald Trump's protectionist trade policies further fuel safe-haven demand.
Fundamental Drivers: Bond Yields and Rate Expectations
The Federal Reserve’s hawkish pause reaffirmed its stance on keeping rates elevated, with Chair Jerome Powell emphasizing that future cuts will be data-dependent, dismissing political influence. Despite this, US Treasury yields remain under pressure, with the benchmark 10-year yield struggling to sustain post-FOMC gains, limiting US Dollar strength.
Gold’s upside momentum is reinforced by expectations of monetary easing, as Trump’s push for lower interest rates and softening inflation data increase the probability of Fed cuts later in 2025. The upcoming ECB rate decision and US Q4 GDP release will be key short-term market drivers.
Technical Outlook: Resistance at $2,772-$2,773 in Focus
Gold’s breakout above the $2,720-$2,725 resistance zone confirms continued bullish momentum. On the daily chart, price action remains constructive, with a test of the $2,772-$2,773 resistance zone likely. A successful break above this level could open the door for a move toward $2,786, last seen in October 2024.
Further upside momentum could drive XAU/USD toward its all-time high at $2,790, with a decisive break above this level shifting focus to the psychological $2,800 mark, which would reinforce the multi-month uptrend.
Support Levels: Key Zones to Watch
On the downside, initial support lies at $2,745-$2,744, with a deeper retracement likely finding bids at $2,730, aligned with the weekly low at $2,725-$2,750 (previous resistance-turned-support). A break below $2,705 would weaken the near-term bullish outlook, exposing $2,684 as the next significant downside level.
Market Outlook: Bullish Bias Remains Intact
With sliding bond yields, trade war fears, and Fed rate cut speculation, gold remains well-positioned for further upside. A break above $2,773 would signal renewed bullish momentum, while failure to hold above $2,745 may lead to temporary consolidation. The focus now shifts to ECB policy signals and the US PCE Price Index for further directional cues.
Fundamental Drivers: Bond Yields and Rate Expectations
The Federal Reserve’s hawkish pause reaffirmed its stance on keeping rates elevated, with Chair Jerome Powell emphasizing that future cuts will be data-dependent, dismissing political influence. Despite this, US Treasury yields remain under pressure, with the benchmark 10-year yield struggling to sustain post-FOMC gains, limiting US Dollar strength.
Gold’s upside momentum is reinforced by expectations of monetary easing, as Trump’s push for lower interest rates and softening inflation data increase the probability of Fed cuts later in 2025. The upcoming ECB rate decision and US Q4 GDP release will be key short-term market drivers.
Technical Outlook: Resistance at $2,772-$2,773 in Focus
Gold’s breakout above the $2,720-$2,725 resistance zone confirms continued bullish momentum. On the daily chart, price action remains constructive, with a test of the $2,772-$2,773 resistance zone likely. A successful break above this level could open the door for a move toward $2,786, last seen in October 2024.
Further upside momentum could drive XAU/USD toward its all-time high at $2,790, with a decisive break above this level shifting focus to the psychological $2,800 mark, which would reinforce the multi-month uptrend.
Support Levels: Key Zones to Watch
On the downside, initial support lies at $2,745-$2,744, with a deeper retracement likely finding bids at $2,730, aligned with the weekly low at $2,725-$2,750 (previous resistance-turned-support). A break below $2,705 would weaken the near-term bullish outlook, exposing $2,684 as the next significant downside level.
Market Outlook: Bullish Bias Remains Intact
With sliding bond yields, trade war fears, and Fed rate cut speculation, gold remains well-positioned for further upside. A break above $2,773 would signal renewed bullish momentum, while failure to hold above $2,745 may lead to temporary consolidation. The focus now shifts to ECB policy signals and the US PCE Price Index for further directional cues.