Daily Price Outlook
Gold prices maintained its bullish trend and surged to new heights on Thursday, reaching a fresh record high around 3,057. However, the bullish rally was driven by the Federal Reserve's anticipated interest rate cuts later this year, which has fueled strong demand for the precious metal.
Moreover, the metal found strong support amid heightened concerns over ongoing geopolitical tensions, including the impact of U.S. President Donald Trump's aggressive trade policies and escalating conflict in the Middle East.
Fed's Rate-Cut Expectations Support Gold's Momentum
As we mentioned, the rally was mainly supported by the market's expectations that the Federal Reserve will soon cut interest rates. Notably, the U.S. central bank kept its key interest rate unchanged in its latest meeting, but the market is pricing in the possibility of two 25-basis-point cuts by the end of the year.
This dovish outlook has put pressure on the U.S. dollar, which has been weighed down by expectations of lower yields, making gold more attractive as an alternative investment.
Analysts are anticipating a 66% chance of a rate cut in July, which has led to an uptick in gold's appeal. As lower interest rates make the U.S. dollar less attractive, investors have turned to gold, boosting its price further.
However, the strength of the U.S. dollar, which rose 0.3% in recent sessions, slightly capped gold's gains, making the precious metal more expensive for foreign buyers. Despite this, geopolitical factors and central bank demand for gold remain supportive, keeping the upward momentum intact.
Geopolitical Tensions Drive Safe-Haven Demand
On the other side, the geopolitical risk has also played a crucial role in gold’s rally. The ongoing trade tensions, particularly between the U.S. and China, have heightened concerns about global economic stability.
Trump's tariffs, seen as inflationary, have raised the risk of a trade war, which has been a driving force behind gold’s ascent this year.
In addition, tensions in the Middle East, particularly between Israel and Gaza, have kept safe-haven demand for gold elevated.
The Israeli military's limited ground incursion into Gaza, coupled with warnings of a wider war, has added to the uncertainty. These geopolitical concerns, along with the potential for further escalation, are likely to continue supporting gold's rally.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading slightly lower at $3,043, down 0.04%, as it consolidates near a key pivot level of $3,044.55. Despite the modest decline, the broader trend remains bullish, supported by expectations of Federal Reserve rate cuts and persistent global economic uncertainties.
The 50-day Exponential Moving Average (EMA) at $3,016 provides strong near-term support, keeping gold within an upward channel.
If prices sustain above the pivot point, the next resistance levels to watch are $3,057.40, followed by $3,067.87 and $3,078.95. A break above these levels could signal renewed bullish momentum, with gold eyeing further highs.
On the downside, immediate support lies at $3,033.30, with a break below this level exposing the next key supports at $3,023.07 and $3,010.48. A move below the 200-day EMA at $2,980 would indicate a shift in sentiment, potentially triggering profit-taking.
For now, gold remains bullish above $3,044, with traders eyeing a breakout toward $3,068. A stop-loss below $3,033 is recommended to mitigate downside risks.
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