XAU/USD Outlook: Prices Eye Breakout Above $2,942 Amid Global Tensions

XAU/USD

Prediction: Increase

Gold prices continue their strong upward trend, forming higher highs and higher lows in recent sessions. Currently, the price is undergoing a correction after reaching the key resistance zone at $2,942.845. Despite some profit-taking pressure, the overall trend remains intact. Investors should closely monitor key support levels to assess the potential for continued upside momentum.

FUNDAMENTAL ANALYSIS

Monetary Policy & Fed Impact

The Federal Reserve maintains a cautious stance on rate cuts. Fed Governor Michelle Bowman stated that she wants to see clearer signs of declining inflation before supporting further rate cuts. This could keep interest rates higher for longer, putting some pressure on gold prices. Several Fed officials are scheduled to speak today, potentially providing more insights into the future monetary policy direction.

Inflation & Market Drivers

Goldman Sachs recently raised its gold price forecast to $3,100/oz by the end of 2025, reflecting growing demand from central banks.

Despite high interest rates and a strong USD, gold prices remain resilient, indicating that safe-haven demand is outweighing yield-driven selling pressure.

Geopolitics & Market Sentiment

U.S.-China Trade War Concerns: Former U.S. President Donald Trump has imposed a 10% tariff on Chinese imports and threatened a 25% tariff on steel, aluminum, and goods from Mexico and Canada. This has raised concerns about a renewed trade war, boosting demand for gold as a safe-haven asset.

Escalating Tensions in Europe: EU leaders are considering increased military support for Ukraine, though concerns remain about the sustainability of a ceasefire. China’s Gold Buying: China may continue accumulating gold during price corrections, supporting the market’s long-term bullish trend.

Key Resistance Levels

● $2,908.251: Nearest resistance; failure to break above may lead to further correction.

● $2,942.845: Recent high; a breakout above this level could push prices toward $2,960 - $3,000.

Key Support Levels

● $2,881.958: Current support; if prices hold above this level, the uptrend may continue.

● $2,850.545: Stronger support; could be a buying opportunity if prices correct further.

● $2,831.106: Major support zone; a key defensive level for buyers.

EMA Levels: 34 EMA at $2,897: Price is fluctuating around this level, indicating a battle between buyers and sellers. 200 EMA at $2,792: Long-term support; could act as a strategic buying zone if prices drop further.

RSI at 53.09: Neutral zone, indicating potential consolidation before a breakout.

Gold remains in an upward trend but is currently undergoing a slight correction after reaching a key resistance level. Market movements are influenced by Trump’s trade policies, safe-haven demand, and the Fed’s monetary stance. Traders should closely watch key support zones and economic data to make informed trading decisions.

 

 

 

 

 

 

 

 

 

 

 

 

 

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