Daily Price Outlook
Gold prices extended their winning streak on Monday, surging more than 2% to reach $3,310 as investors flocked to safe-haven assets amid rising geopolitical tensions and growing concerns over the Federal Reserve's monetary policy.
However, the sharp rally in Gold (XAU/USD) came after a weekend of heightened risks, including a Houthi attack on Ben Gurion Airport and Israel's plans for a large-scale ground offensive in Gaza.
These developments have intensified market uncertainty, driving traders to seek the stability of gold as a hedge against global instability and potential shifts in U.S. interest rate policies.
Therefore, the news of US President Donald Trump hinting at military action to take control of Greenland further added to the sense of global instability, driving demand for gold as a secure investment.
Gold's Safe-Haven Demand Rises Amid Geopolitical Tensions in the Middle East
On the geopolitical front, the safe-haven demand for gold has been growing as tensions rise. The Houthi attack and the expected Israeli retaliation have raised concerns about instability in the region, pushing investors to seek the stability of gold.
However, the conflicts in the Middle East continue to create uncertainty, traders are turning to gold, which has long been considered a reliable store of value during times of geopolitical turmoil. This increasing demand for gold highlights its role as a safe-haven asset when global risks intensify.
Gold's Appeal Boosted by Fed Rate Cut Speculations and Geopolitical Tensions
In addition to geopolitical risks, the ongoing speculations surrounding the Federal Reserve’s upcoming interest rate decision are also playing a major role in pushing gold prices higher. However, the market is gearing up for the Fed's meeting on May 7, with traders anxious about potential rate cuts.
President Trump’s continued criticism of the Fed and its Chairman Jerome Powell, coupled with his calls for rate cuts, has contributed to heightened expectations. However, the CME FedWatch tool indicates a 94.6% probability that the Fed will keep rates unchanged in the immediate term.
Despite signs of a slowdown in the US economy, including recent weaker Nonfarm Payrolls data and slower manufacturing and services growth, the economy is not in freefall.
This slower pace of growth gives the Fed space to keep interest rates steady, which supports gold's appeal.
Hence, the Fed’s careful approach to rate cuts also signals that higher rates could stick around for longer, making gold more attractive as an alternative investment.
Gold's Bullish Outlook Amid Fed's Rate Cut Speculations and Geopolitical Risks
Looking forward, traders are keeping a close eye on both the geopolitical situation and the Fed's monetary policy.
The likelihood of a rate cut by the Federal Reserve in its May meeting is low at just 5.2%, but June has a much higher chance at 46.6%.
These expectations, along with ongoing geopolitical risks, suggest that gold could continue to rise in the short term.
Despite many Asian markets and the UK being closed for a public holiday, gold is still benefiting from strong buying interest.
Apart from this, the gold mining sector is seeing significant changes, with Gold Road Resources agreeing to a $3.7 billion takeover by Gold Fields, pointing to more industry consolidation.
Therefore, the strong buying interest in gold, coupled with industry consolidation like Gold Road's $3.7 billion takeover, signals confidence in the sector, potentially driving gold prices higher due to increased demand.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) continues to trade within a defined descending channel, capped by a stubborn resistance band near $3,270.
The metal attempted a breakout early Friday but failed to close above the 50-period SMA at $3,269.98, aligning closely with the descending trendline—a confluence zone acting as a barrier to bullish continuation.
Candlestick behavior shows indecision, with a spinning top forming near resistance, reinforcing the need for caution.
Technically, gold printed a series of higher lows from the $3,215 zone, suggesting gradual accumulation. Yet, no higher high has confirmed a trend reversal.
The Relative Strength Index (RSI) hovers at 53.47, near-neutral territory, but diverges modestly against recent price highs—a signal that bullish momentum is fading unless a fresh catalyst emerges.
The key pivot to watch is $3,270. A sustained break above this level, particularly with a bullish engulfing candle and volume spike, could open the door to $3,300 and $3,320.
However, price remains below the SMA and trapped beneath the trendline. Until bulls reclaim the $3,270–$3,275 zone, downside risks linger. A rejection here could lead to renewed bearish pressure toward $3,215, with deeper support at $3,171.
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