Article by: ETO Markets
Gold oscillated just above the $… mark on Tuesday’s Asian session as bullish bullion demand remained subdued by a generally upbeat risk environment driven by rising trade optimism and fresh hopes for a Russia-Ukraine ceasefire, which have buoyed equities at the expense of traditional safe havens. At the same time, the US dollar languished near its one-week lows amid growing market conviction that the Federal Reserve will cut rates at least twice in 2025—a view reinforced by weak US inflation and retail-sales data—thereby discouraging aggressive bearish positioning in non-yielding gold. Last week’s modest gains following Moody’s one-notch downgrade of US sovereign credit to Aa1 failed to catalyze further gold upside, as upbeat trade news and dovish rate-cut bets weighed heavily. Fed speakers struck a mixed tone: Atlanta’s Raphael Bostic signaled caution on the pace of disinflation and leaned toward only one cut this year, New York’s John Williams highlighted economic uncertainty despite balanced labor markets, Vice Chair Philip Jefferson flagged potential tariff-driven price-level shifts, and Minneapolis’s Neel Kashkari supported a wait-and-see stance amid ongoing trade-policy ambiguity. Meanwhile, geopolitical developments—from Israel’s intensified operations in Gaza and evacuation orders in Khan Yunis to US-brokered talks on a Russia-Ukraine ceasefire announced by former President Trump—have further shaped risk sentiment. With no major US data on the docket today, traders will look to FOMC speeches and trade-related headlines for fresh impetus around XAU/USD.
From a technical perspective, gold’s recent inability to reclaim the 200-period SMA on the 4-hour chart—instead seeing that level flip from support to resistance—coupled with bearish momentum readings on both hourly and daily oscillators, strongly favors further declines in XAU/USD. A decisive break and close below $…—and more critically the $…–$… zone—would validate this downside bias and likely send prices toward last week’s swing low near $… (the lowest since April 10), with $… and then $… acting as successive support targets. Conversely, only a sustained move above the $…–$… area would signal that a bottom may be in place, potentially opening the door to test intermediate resistance around $…–$… and, ultimately, the $… round number—clearing which would shift the near-term outlook back in favor of the bulls.
