XAUUSD Technical Analysis: Gold Consolidates Amid Economic Turmoil

XAUUSD
 
Prediction: Bearish 

Gold is currently in a corrective downtrend after reaching its record high of $2,956.31 on February 24, 2025. Currently, the price is fluctuating around the $2,883 - $2,891 range as profit-taking pressure emerges following a strong rally. While the medium-term trend remains bullish, short-term pressure for a correction is evident. 

FUNDAMENTAL ANALYSIS 

Monetary Policy and Fed Impact: 

Investors are awaiting the CPI (Wednesday) and PPI (Thursday) data from the U.S. to assess the Fed's interest rate outlook. Higher-than-expected inflation data could prompt the Fed to maintain elevated interest rates for longer, putting downward pressure on gold. 

The U.S. 10-year Treasury yield fell 5 basis points during the Asian session, following a 10 basis point drop the previous day — the largest decline in nearly a month. This has weakened the USD and provided short-term support for gold. 

Currently, markets are expecting the Fed to cut rates by 88 basis points in 2025 (up from the previous forecast of 75 basis points), creating a more favorable environment for gold. 

Inflation and Market Dynamics: 

U.S. President Donald Trump continues to stir economic uncertainty with new tariff policies, raising concerns about inflation and recession. His reference to a "transition phase" without ruling out recession risks has further unsettled investors. 

Global equities are experiencing a significant sell-off due to growth slowdown concerns. The S&P 500 dropped 2.7% — its sharpest decline in 2025 — while the Nasdaq fell 4%. This has driven demand for safe-haven assets like gold. 

Oil prices have fallen for two consecutive sessions amid concerns about weakening energy demand, adding further pressure on global economic growth. 

Geopolitical Risks and Market Sentiment: 

Trade tensions continue to escalate as Trump imposes a 25% tariff on imports from China, Mexico, and Canada. Although some items have been temporarily exempted, ongoing uncertainty is fueling investor concerns. 

The Japanese yen and Swiss franc have strengthened significantly, reflecting increased demand for safe-haven assets. 

TECHNICAL ANALYSIS 

Key Resistance Levels 

●    $2,906.715: The nearest resistance; breaking above this could trigger a recovery $2,929. 

●    $2,929.035: A strong resistance zone, aligning with previous highs. 

●    $2,956.505 - $2,960: The all-time high region; significant buying pressure would be required to break this level. 

Key Support Levels

●    $2,883.246: Immediate support zone where the price is currently consolidating. 

●    $2,858.874: A stronger support area, aligning with the 200-day EMA. 

●    $2,833.988: A crucial support zone; breaking below this may signal a deeper downtrend. 

Technical Indicators: 

RSI: Currently at 49.02, indicating neutral momentum. Previously, RSI dropped from above 60 to below 50, suggesting selling pressure is building. 

Volume: Trading volume is gradually decreasing, reflecting cautious market sentiment as investors await key economic data. 

Prioritize short-term trades with entry points around key support/resistance zones. Closely monitor the CPI (Wednesday) and PPI (Thursday) reports for clearer trend signals. Amid ongoing global uncertainty and Trump's unpredictable trade policies, gold is likely to retain its safe-haven appeal in the medium term. 

 

 

 

 

 

 

 

 

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