Gold Price Surges Above $3,300 Amid Economic Concerns and Geopolitical Tensions
- Gold Price Continues Upward Trend
- US Dollar Weighed Down by Various Factors
- Gold Price Breaks Range as RSI Turns Bullish
Gold Price Looks to Surpass $3,300 Threshold
The gold price is on an upward trajectory for the third consecutive day in Asian trading, aiming to reclaim the $3,300 mark amid ongoing weakness in the US Dollar and escalating geopolitical tensions.
Markets are adopting a cautious stance, leading to increased safe-haven demand for gold. Concerns about the US economy resurfaced following Moody’s downgrade of the nation’s credit rating last week. Additionally, the approval of President Trump’s tax cut bill is expected to widen the fiscal deficit, fueling the ‘Sell American’ campaign and exerting bearish pressure on the US Dollar.
Uncertainty surrounding US trade policies, the US-China trade tensions, and the possibility of G7 nations imposing levies on low-value Chinese goods are further dampening the global economic outlook. As a result, investors are turning to traditional safe-haven assets like gold, pushing its price to fresh eight-day highs above $3,300.
Geopolitical tensions are also contributing to gold’s rally, with reports of Israel preparing to strike Iranian nuclear facilities and doubts about nuclear talks between Iran and the US. Additionally, concerns persist about the Russia-Ukraine peace talks, adding to the overall risk-off sentiment in the market.
Looking ahead, gold is poised for further gains, supported by cautious statements from Federal Reserve policymakers amidst economic uncertainty. The potential for increased Fed rate cuts is bolstering gold’s appeal as a non-interest-bearing asset.
Technical Analysis of Gold Price: Daily Chart
- Gold price broke above the recent range between the 21-day and 50-day Simple Moving Averages (SMA), with the RSI turning bullish.
- The critical support near $3,165 (61.8% Fibonacci Retracement level) held firm, prompting a rebound in gold price.
- To sustain the uptrend, gold buyers need to breach the 21-day SMA at $3,289, targeting the falling trendline resistance at $3,387.
- In case of a pullback, the 50-day SMA at $3,185 will provide initial support, followed by the $3,100 level if critical support is breached.
In conclusion, the gold price is surging above $3,300 driven by economic concerns, geopolitical tensions, and a weakened US Dollar. Investors are flocking to gold as a safe-haven asset amidst uncertainty, with further upside potential expected. Technical indicators suggest a bullish outlook for gold, with key levels to watch for potential price movements.