Daily Price Outlook
Gold (XAU/USD) prolonged its bullish rally and hit an all-time high of $3,028. The reason behind this record surge is the ongoing geopolitical tensions, fears of a slowdown in the US economy, and strong expectations of multiple interest rate cuts by the Federal Reserve (Fed) this year. Investors are increasingly moving towards gold as a safe-haven asset amid rising market uncertainty.
Despite a slight recovery in the US Dollar (USD), gold remains well-supported because lower interest rates typically make non-yielding assets like gold more attractive.
In the meantime, the ongoing concerns over global economic instability continue to drive demand for the metal.
Geopolitical Uncertainty Fuels Safe-Haven Demand
On the geopolitical front, the ongoing Middle East conflict continues to push gold prices higher. The Israel Defense Forces (IDF) have intensified military strikes on Hamas targets in Gaza after ceasefire talks failed, raising fears of more violence.
At the same time, tensions in the Red Sea have escalated, with the US launching airstrikes against Houthi forces in response to their attack on the USS Harry S. Truman aircraft carrier.
Adding to the uncertainty, former US President Donald Trump has warned Iran of serious consequences, increasing global instability. These rising geopolitical risks have strengthened gold’s appeal as a safe-haven asset, as investors look for protection against market turmoil.
US Economic Slowdown and Weak Data Boost Gold Prices
On the US front, the increasing concerns about a slowing US economy have further boosted gold prices. US Treasury Secretary Scott Bessent recently admitted the risk of a possible recession in 2024, making investors more cautious.
Meanwhile, the latest US Retail Sales report showed only a 0.2% increase in February, much lower than the expected 0.7% gain.
This weaker-than-expected data suggests that consumer confidence is declining, raising fears of economic slowdown.
As a result, speculation has grown that the Federal Reserve may have to cut interest rates to support economic growth.
Market participants are increasingly betting on multiple Fed rate cuts this year. Fed funds futures indicate a potential 25 basis-point rate cut in June, followed by additional cuts in July and October.
Gold Awaits Key FOMC Decision
Looking ahead, market focus shifts to the upcoming two-day FOMC meeting, with investors awaiting further clues on the Fed’s policy stance.
Meanwhile, economic data releases, including US Industrial Production, Housing Starts, and Canadian inflation figures, will also be closely monitored for potential market-moving insights.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $3,013.33, maintaining a steady uptrend after a slight 0.01% gain in early trading. The metal is consolidating above its pivot point at $3,007.95, reinforcing a bullish bias as long as this level holds. The 50-day EMA at $2,971.31 continues to act as a strong support zone, preventing deeper pullbacks.
On the upside, immediate resistance at $3,019.58 remains a key hurdle for buyers. A break above this level could trigger further gains, with the next resistance at $3,028.31, followed by $3,036.90. If bullish momentum strengthens, a push toward the $3,050 zone is possible in the near term.
Conversely, support at $2,996.48 serves as the first safety net for gold. A drop below this level may expose $2,986.84, with deeper support resting at $2,976.53. A failure to hold these levels could shift sentiment toward a bearish correction.
Gold's price action suggests that traders are awaiting stronger catalysts, such as economic data or central bank policy signals, to drive momentum. For now, the upward trend remains intact, and a break above $3,019 could fuel further buying interest. However, a drop below $2,996 may invite selling pressure.
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