Key Takeaways
- Gold is trading near $3,318, with key support at $3,234 and resistance at $3,320.
- A break above $3,320 could target the $3,350–$3,400 range; a drop below $3,234 may lead to $3,200 or lower.
- Market sentiment is heavily influenced by expectations of Federal Reserve policy decisions and geopolitical developments.
- Traders should monitor the Fed’s policy meeting and global trade news for cues on gold’s next move.
Market Dynamics and Recent Performance
Gold prices have rebounded at the start of the week, trading around $3,318 per ounce on May 5, 2025. This recovery follows a recent dip from April’s record high of $3,500, influenced by easing trade tensions and a strengthening U.S. dollar. The current uptick is attributed to renewed safe-haven demand amid ongoing geopolitical uncertainties and investor caution ahead of the Federal Reserve’s policy meeting.
Technical and Fundamental Influences
From a technical standpoint, gold is exhibiting signs of a potential bullish reversal. The price has breached the 50-day Exponential Moving Average (EMA), indicating a shift in momentum. The Relative Strength Index (RSI) is approaching 65, suggesting increasing buying interest without entering overbought territory.
Key support levels are identified at $3,248 and $3,234, while resistance is observed near $3,320. A decisive move above this resistance could pave the way toward the $3,350–$3,400 range. Conversely, a break below the $3,234 support may expose gold to further downside, targeting levels around $3,200 and potentially $3,150.
Fundamentally, the market is influenced by expectations of Federal Reserve policy decisions. Despite a strong U.S. jobs report showing 177,000 jobs added in April, the dollar remains under pressure due to speculation about potential rate cuts later this year. This dovish outlook supports gold’s appeal as a non-yielding asset.
Looking Forward
The upcoming week is pivotal for gold traders, with the Federal Reserve’s policy meeting and ongoing geopolitical developments in focus. Should the Fed signal a continuation of its dovish stance, gold may find support and attempt to retest higher resistance levels. However, any hawkish surprises or positive developments in global trade relations could strengthen the dollar and apply downward pressure on gold prices.
