Daily Price Outlook
Gold (XAU/USD) extended its upward trend and remained well-supported around $2,950 on Thursday, as the latest US Consumer Price Index (CPI) data came in weaker than expected.
However, the softer inflation figures eased concerns about economic stagflation, reducing fears of an imminent recession.
This led to an outflow from US bonds, pushing bond yields higher, while stocks rallied as investors became more optimistic about economic conditions.
Despite the rise in bond yields, gold remained strong, supported by expectations that the Federal Reserve could cut interest rates sooner, keeping demand for the precious metal intact.
The US inflation data reinforced market expectations that the Federal Reserve will cut interest rates by 25 basis points in June.
According to the CME FedWatch Tool, there is a 97.0% probability that the Fed will keep rates unchanged in its March 19 meeting, while the odds of a rate cut in May stand at 39.5%.
Geopolitical Tensions Fuel Gold’s Bullish Momentum Amid Trade and Military Concerns
In addition to economic factors, geopolitical uncertainties are further driving gold’s bullish momentum. US President Donald Trump announced plans to impose reciprocal tariffs on European goods, set to take effect on April 2.
This move has raised concerns about potential trade disputes between the US and the EU, prompting investors to seek refuge in gold as a safe-haven asset.
Meanwhile, US diplomatic efforts are underway to negotiate a ceasefire in the Russia-Ukraine conflict. Reports suggest that a deal, which includes continued US military support for Ukraine, has already gained some traction.
If geopolitical tensions escalate further, demand for gold could increase, pushing prices toward new record highs.
Gold Poised for Further Gains Amid Economic Uncertainty and Trade Tensions
Looking ahead, analysts predict that gold will continue its upward climb. BNP Paribas expects XAU/USD to surpass $3,100 in Q2 2025, driven by heightened economic uncertainty due to Trump’s aggressive trade policies.
Furthermore, Macquarie Bank projects gold could reach $3,500 by Q3 2025, citing a worsening US budget outlook that may trigger higher inflation and increase demand for gold as an inflation hedge.
Traders will closely watch upcoming US economic data and central bank decisions for further direction. For now, gold remains well-supported as investors weigh trade tensions, Fed rate cut expectations, and the broader economic landscape.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is holding firm above $2,938.55, up 0.01%, as it consolidates within a tight range. The metal continues to benefit from expectations of Federal Reserve rate cuts and geopolitical uncertainties, supporting its bullish momentum.
The key pivot point at $2,931.19 serves as an important level—staying above this mark could fuel further gains, while a drop below may expose gold to increased selling pressure.
On the upside, immediate resistance sits at $2,947.09, followed by $2,956.47 and a stronger barrier at $2,965.37.
A breakout above these levels could trigger a move toward fresh highs, particularly if macroeconomic conditions continue to favor safe-haven assets.
Gold remains well-supported by its 50-day EMA at $2,914.06, reinforcing near-term bullish sentiment.
Conversely, should gold fail to hold above $2,931.19, immediate support is found at $2,921.65, followed by $2,909.24 and $2,897.64.
A break below these levels would indicate a shift in sentiment, increasing downside risk. The overall trend remains bullish as long as prices stay above $2,931, with traders eyeing key economic data for potential market-moving catalysts.
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