Gold is consolidating after reaching a new all-time high. Concerns over U.S. President Donald Trump's aggressive trade policy and its impact on the global economy continue to drive demand for safe-haven assets like gold. Additionally, expectations that the Fed will raise interest rates multiple times this year amid a slowing U.S. economy are adding further support to the yellow metal.
Positive news on U.S.-Canada trade negotiations and confidence that Democrats will avoid a government shutdown are improving market sentiment. Increased demand for the U.S. dollar is limiting bullish bets on gold. However, the fundamental backdrop suggests that the path of least resistance for XAU/USD remains to the upside.
From a technical perspective, the breakout of resistance in the $2928-$2930 range and a move above the previous record near $2956 triggered further growth. However, the Relative Strength Index (RSI) on the daily chart is near overbought territory, indicating the need for short-term consolidation or a moderate pullback before the next upward move. Nonetheless, the overall trend remains bullish, supporting expectations of continued gains.
In the event of a pullback, the $2956 zone is likely to attract new buyers, while the $2930-$2928 range now serves as key support. A break below this level could trigger technical selling, leading to deeper losses toward the psychological level of $2900 and the $2880 level, where the weekly low is located.
