Article by: ETO Markets

Gold prices (XAU/USD) hit new highs this week, driven by dovish Federal Reserve policy, geopolitical risks and uncertainty in the U.S. economy. The Fed's aggressive 50 basis point rate cut last week, with markets expecting a further 125 basis point cut this year, has sapped the dollar's ability to recover and supported safe-haven demand for gold. In addition, escalating conflicts in the Middle East, political uncertainty in the United States and fears of a global economic slowdown have further pushed up gold prices. However, as market participants await this week's speeches by Federal Reserve officials and the release of US Personal consumption expenditures (PCE) price index data, gold's upside may be limited in the near term.

From a technical perspective, gold's recent break above the $… mark indicates a strong bullish trend, but the Relative Strength Index (RSI) suggests that the market is already close to overbought territory and may face some risk of profit-taking in the near term. If gold breaks below $…, support will be located near the $… and $… areas, while a break below the psychological level of $… could turn the short-term trend bearish. However, as long as the gold price remains above $…, the overall uptrend remains intact, with the primary resistance level at $…, which may challenge the $… high after the breakout, and may continue to challenge higher levels later.