Key Takeaways:
- Gold closed at $2,786.06, approaching its record high of $2,790, supported by a weakening dollar and increased Fed rate cut expectations.
- Key technical levels include resistance at $2,790 and support around $2,750, with a potential move toward $2,800 if bullish momentum persists.
- The U.S. dollar posted its worst weekly decline in over a year, reinforcing gold’s appeal as a safe-haven asset.
- Trump’s trade and fiscal policies, particularly on tariffs and rate cuts, will remain key drivers of gold’s price action in the coming week.
- The Federal Reserve’s policy stance and upcoming economic data releases will be crucial in shaping gold’s trajectory.
Market Dynamics and Recent Performance
Gold (XAU/USD) continued its bullish trajectory, closing at $2,786.06, just short of its record high of $2,790. This marked the fourth consecutive weekly gain for gold, driven by a weakening U.S. dollar and increasing speculation around Federal Reserve rate cuts. The dollar index saw its steepest weekly decline in over a year, dropping 1.77%, enhancing gold’s appeal as a hedge against inflation. President Donald Trump’s recent policy remarks on trade tariffs and interest rates have further fueled uncertainty, reinforcing gold’s safe-haven status.
Technical and Fundamental Influences
Gold’s technical structure remains strong, with critical support near $2,750 and a firm resistance zone around $2,790. A decisive break above this level could pave the way for a test of $2,800, with momentum indicators suggesting continued bullish sentiment. The 50-day moving average is providing robust support, ensuring that pullbacks remain shallow. The RSI hovers near overbought territory, indicating that gold may see temporary consolidation before resuming its uptrend.
Fundamentally, Trump’s push for lower interest rates at the World Economic Forum added pressure on the dollar, further bolstering gold prices. Additionally, softer-than-expected U.S. economic data has increased speculation that the Fed may be more inclined toward easing monetary policy. The market’s focus will remain on any upcoming rate decisions and inflation data, as expectations of lower borrowing costs make gold more attractive. Despite trade policy uncertainty easing, investors remain cautious, keeping gold well-positioned as a hedge.
Looking Forward
The coming week will be pivotal for gold, as traders assess further signals from the Fed and monitor potential tariff announcements from the U.S. administration. A continued decline in the dollar, coupled with any dovish rhetoric from central bank officials, could push gold above its all-time high. On the other hand, a stabilization in U.S. Treasury yields or stronger-than-expected economic data could cap gains and lead to a temporary retracement. The $2,750 support level will be crucial in determining whether gold can maintain its bullish trend.
