Gold Price Sustains Gains Above $3,000, Yet Bullish Strength Remains Limited

Image Credit: Reuters

Gold (XAU/USD) maintains modest gains during the early European session on Tuesday, managing to break a three-day losing streak. The US Dollar (USD) is struggling to build on its recent rebound from a multi-month low, consolidating near a three-week high reached on Monday, amid expectations that the Federal Reserve (Fed) will soon resume its rate-cutting cycle. This, coupled with concerns about a potential US economic slowdown due to tariffs, provides support to the non-yielding yellow metal.

Additionally, optimism about reduced US trade tariffs, the Russia-Ukraine peace talks, and China's stimulus measures contribute to a generally positive risk sentiment. However, these factors may prevent traders from making fresh bullish bets on Gold and limit any further gains. Despite this, the overall fundamental outlook suggests that the path of least resistance for XAU/USD is to the upside. As a result, any minor pullbacks may be viewed as buying opportunities and are likely to be limited. 

From a technical standpoint, Gold has shown resilience around the $3,000 mark, which is expected to act as a key support level. A decisive break below this level could trigger technical selling, pushing the price towards the $2,982-$2,978 range. The decline may extend further to the $2,956-$2,954 area, which is now acting as support after previously being a resistance point.

On the upside, the $3,033 area, the recent swing high, appears to be the immediate hurdle, followed by the all-time peak around $3,057-$3,058 set last week. With daily chart oscillators remaining in positive territory, any follow-through buying could act as a fresh trigger for further bullish momentum, continuing the multi-month uptrend.

Paraphrasing text from "Reuters" all rights reserved by the original author