Gold is showing positive momentum as it attempts to hold above the $3300 level, indicating growing investor interest in this traditional safe-haven asset.
The uncertainty surrounding U.S.-China trade relations—highlighted by yesterday's comments from U.S. Treasury Secretary Scott Bessent—suggests that the current standoff may last longer than initially expected. Additionally, potential consequences of Donald Trump's tariff policies are creating a backdrop of elevated demand for gold.
The Federal Reserve's Beige Book points to rising uncertainty in the economy due to shifting tariffs, which could limit further dollar gains in the coming months. Mixed data on consumer spending and signs of cooling in the labor market are also contributing to a more cautious outlook. The weakening U.S. dollar and expectations of more aggressive easing from the Fed continue to support precious metal prices.
At the same time, lingering hopes for a potential trade deal between the U.S. and China are helping to sustain a degree of market optimism, which may cap gold's upside in the near term.
Technical Outlook:
- $3370 is emerging as a key resistance level. A sustained breakout above it would open the door to higher targets, including $3400, followed by stronger resistance at $3425, and the broader target at $3500 would remain in play.
- However, if gold falls below $3300, this may signal a potential pullback. The first major support lies at $3260, and a break below this level would be critical, paving the way for further downside toward $3250 and possibly the key psychological level of $3200.
Still, with oscillators on the daily chart holding firmly in positive territory, the broader path of least resistance for gold remains upward.
