Article by: ETO Markets
Gold prices are currently navigating a turbulent environment shaped by a mix of geopolitical developments and monetary policy expectations. After climbing to a record high of $… last Friday, XAUUSD has eased back to hover around $2,990 as the new week begins. The market is gripped by anticipation ahead of several high-stakes events, including the German Bundestag's vote on a €1 trillion defense spending initiative and a critical meeting between US President Trump and Russian President Putin aimed at brokering a peace deal for Ukraine. These unfolding situations are heightening uncertainty, reinforcing gold's allure as a safe-haven investment. Meanwhile, the US Federal Reserve's FOMC meeting scheduled for Tuesday and Wednesday looms large, with traders expecting interest rates to remain steady but parsing every word of the accompanying statement and Chair Powell's remarks for hints about future policy shifts. Recent US economic indicators, such as tepid retail sales figures, have fueled speculation of a dovish tilt from the Fed, offering additional support to gold's price resilience in the face of these uncertainties.
Turning to the technical perspective, XAUUSD appears to be continueously in a up trending after passing the psychologically significant $… threshold following its recent upward sprint. The 10-day and 20-day Simple Moving Averages, positioned at $… and $… respectively, are trending higher, which underscores the prevailing bullish sentiment in the market. However, caution is warranted as the Relative Strength Index sits at 69.71, flirting with overbought conditions that could foreshadow a brief retreat or sideways movement. The MACD indicator, while still in positive territory, shows a subtle narrowing of its histogram, hinting at a slight cooling in bullish momentum. Resistance is firmly established at the recent high of $…, and a sustained push beyond this point could propel prices toward $… or higher. Conversely, support is evident at $…, with more robust backing near $…and $…, where the moving averages converge to form a potential buffer. The Average True Range, registering at 41.52, points to elevated volatility, urging traders to brace for possible sharp swings as the market reacts to this week's developments.
