Gold continues to assert its role as a safe-haven asset, drawing strength from ongoing economic and geopolitical uncertainties. As market participants weigh evolving trade policies and currency fluctuations, the precious metal's trajectory remains closely tied to shifting risk sentiment and macroeconomic conditions. Recent price action reflects investor caution, with gold nearing key resistance levels amid persistent demand for stability in an uncertain global landscape.
Overview
Gold continues to assert its role as a safe-haven asset, drawing strength from ongoing economic and geopolitical uncertainties. As market participants weigh evolving trade policies and currency fluctuations, the precious metal's trajectory remains closely tied to shifting risk sentiment and macroeconomic conditions. Recent price action reflects investor caution, with gold nearing key resistance levels amid persistent demand for stability in an uncertain global landscape.
Key Economic Events
Thursday 15:30 (GMT+2) - Canada: Retail Sales m/m (CAD)
Thursday 15:30 (GMT+2) - USA: Unemployment Claims (USD)
Friday Tentative - Japan: BOJ Policy Rate (JPY)
Friday 10:15 am (GMT+2) - France: French Flash Manufacturing PMI (EUR)
Friday 10:15 am (GMT+2) - France: French Flash Services PMI (EUR)
Friday 10:30 am (GMT+2) - Germany: German Flash Manufacturing PMI (EUR)
Friday 10:30 am (GMT+2) - Germany: German Flash Services PMI (EUR)
Friday 11:30 am (GMT+2) - UK: Flash Manufacturing PMI (GBP)
Friday 11:30 am (GMT+2) - UK: Flash Services PMI (GBP)
Friday 16:45 (GMT+2) - USA: Flash Manufacturing PMI (USD)
Friday 16:45 (GMT+2) - USA: Flash Services PMI (USD)
Technical Analysis
Gold has entered a breakout phase after a two-month consolidation, with prices setting sights on the $2,789.99 all-time high. The rally is underpinned by a combination of technical and fundamental factors, with the latest upward move confirmed by a bullish failure swing reversal. Notably, the trough at $2,596.10 held above the prior low, and the subsequent breach of the $2,639.09 peak has opened the door for further upside potential.
The bullish outlook is further supported by gold's sustained positioning above the 50-period Exponential Moving Average (EMA), reinforcing positive sentiment. Additionally, momentum indicators confirm the strength of the uptrend, with the Momentum Oscillator holding above the 100 baseline, signaling continued upward pressure, while the Relative Strength Index (RSI) crossing the 50 level reflects growing buying interest.
Overall, the technical setup suggests further gains, with key resistance levels to watch as the market seeks new highs.
Potential Upside Targets
If the bulls maintain control of the market, traders may consider the following four potential upside targets:
2789.99: The first resistance is seen at 2789.99, which corresponds to the all-time high marked on October 31.
2839.48: The second price target is identified at 2839.48, representing the 423.6% Fibonacci Extension drawn from the high point, 2724.70, to the low point, 2689.23.
3125.35 The third resistance level is established at 3125.35, representing the 261.8% Fibonacci Extension drawn from the weekly high point, 2789.99, to the low point, 2582.72.
3460.72: An additional resistance is recognized at 3460.72, aligning with the 423.6% Fibonacci Extension drawn from the weekly high point, 2789.99, to the low point, 2582.72.
Potential Downside Targets
If the sellers take control of the market, traders may find potential opportunities in the following four downside targets:
2724.70: The initial support level is observed at 2724.70, reflecting the swing high from January 16.
2689.23: The second level of support is identified at 2689.23, corresponding to the swing low marked on January 20.
2664.30: The third level of support is 2664.30, which corresponds to the weekly support, S1, calculated using the standard Pivot Points methodology.
2626.50: An additional support is seen at 2626.50, reflecting a swing low marked on December 20.
Fundamentals
Gold prices climbed to an 11-week high on Wednesday, approaching last year's record peak, as uncertainty surrounding US President Donald Trump's trade policies and a weaker dollar fueled safe-haven demand, according to a report by Reuters. Spot gold rose 0.3% to $2,751.89 per ounce, while US gold futures gained to $2,768.40.
Market analysts cited by Reuters attribute the bullish tone to uncertainty over potential tariffs on the European Union and China, which has pressured the dollar and increased gold's appeal. However, the prospect of prolonged higher interest rates by the Federal Reserve could weigh on gold's outlook as an inflation hedge.
Meanwhile, silver, palladium, and platinum also posted modest gains, reflecting broader investor interest in precious metals amid global economic concerns.
Conclusion
Gold's recent rally underscores its enduring appeal as a safe-haven asset amid ongoing economic and geopolitical uncertainties. With prices approaching key resistance levels, technical indicators point to sustained upward momentum, while fundamental factors, including trade policy uncertainties and a weaker dollar, continue to drive demand. However, potential headwinds from prolonged higher interest rates may pose challenges to further gains. As market participants navigate evolving conditions, vigilance remains key in assessing gold's trajectory in the near term.