Article by: ETO Markets
From a fundamental perspective, the expectation of interest rate cuts by major central banks around the world is one of the key factors driving gold prices higher. The low interest rate environment reduces the opportunity cost of holding gold and increases the market demand for this non-yielding asset. At the same time, the continued escalation of geopolitical risks in the Middle East, especially the intensification of conflicts between Israel, Iran and Lebanon, as well as political uncertainty in the United States, have increased the safe-haven appeal of gold. Although the US dollar has rebounded recently, the possibility of further interest rate cuts by the Federal Reserve will put pressure on the US dollar, which will continue to benefit gold prices. In addition, China's stimulus policies will also help support global capital flows, indirectly boosting demand for gold.
On the technical side, gold prices successfully broke through the key resistance level of $… last week and hit a record high of $…-$… this week, confirming the upward trend. However, the relative strength index (RSI) on the daily chart has exceeded 70, indicating an overbought state, suggesting that consolidation or a small correction may occur in the short term. The current support levels are $…, $…-$…, and $…-$…, while the upside target is at a higher level after breaking through the historical high. Therefore, although the trend remains bullish, investors need to be cautious in the short term and wait for potential correction opportunities.
