Article by: ETO Markets
Gold prices are exhibiting strong upward momentum, pushing towards the $3,500 mark following a breakout earlier in the week. This surge is underpinned by persistent global economic uncertainties, particularly surrounding US-China trade relations and the potential impact of tariffs announced by the Trump administration, which bolsters demand for the safe-haven metal. Adding further support are expectations of renewed US Federal Reserve rate cuts, amplified by political pressure on the central bank's independence, leading to a weaker US Dollar environment. Continued robust purchasing by global central banks, notably the People's Bank of China, and significant inflows into gold-backed ETFs, especially from China, also provide a solid foundation for the current rally. Lingering concerns about inflation and ongoing geopolitical tensions in the Middle East contribute additional underlying support for bullion. Market sentiment remains decidedly bullish, reflected in increased speculative long positions and upgraded price forecasts from major financial institutions, although the rapid ascent warrants some caution.
The technical picture shows Gold (XAU/USD) consolidating near $… after establishing a new all-time high at $…. This recent peak now acts as the immediate resistance level. Given the unprecedented price territory, the next significant psychological resistance barrier is likely the $… mark. While the strong uptrend remains firmly in place, the daily Relative Strength Index (RSI) reading of 79.37 signals significantly overbought conditions, potentially heralding a phase of consolidation or a corrective pullback before the next leg higher. Immediate support can be identified near the previous day's high around $…, which aligns with the breakout zone of $…. A failure to hold this area could lead to a test of the April 17th former resistance, now potential support, at $…. Further support lies near the rapidly rising 9-day Exponential Moving Average, currently calculated around $…. Despite the overbought readings, the bullish MACD configuration suggests underlying strength, and pullbacks may attract buying interest.
