Photo by Dmitry Demidko on Unsplash
 

Gold (XAUUSD) remains resilient despite policy caution from the Federal Reserve and stronger-than-expected U.S. data. The Fed delivered a widely anticipated 25 basis point rate cut but signalled a more data-dependent stance in the future. Early optimism pushed gold higher and weighed on the Dollar, though Powell’s cautious tone later helped the Dollar recover. Still, gold held its ground, supported by risk-driven demand and a well-established technical trend.
 

Gold Maintains Strength amid Mixed Fed Signals and Robust U.S. Data

Gold remains on an upward path despite the Federal Reserve’s cautious policy tone. Specifically, the central bank delivered a 25 basis point rate cut as expected. However, its updated projections, particularly the Dot Plot, hinted at two additional cuts later this year. This initially weighed on the Dollar and triggered a rally in gold. However, in his post-meeting press conference, Fed Chair Jerome Powell described the move as a precautionary step. Furthermore, he emphasised a data-dependent approach moving forward. These remarks, in turn, helped the Dollar recover and led to a brief pullback in gold prices.

After retreating briefly, gold managed to hold its ground despite renewed strength in the Dollar. Recent U.S. economic data added support to the Dollar. Notably, initial jobless claims fell by 33,000, offsetting the sharp increase seen the previous week. The Philadelphia Fed Manufacturing Index also jumped to 23.2, well above forecasts. Collectively, the data boosted confidence in economic stability. However, gold remained strong, highlighting steady demand despite conflicting macro signals.

At the same time, heightened market uncertainty continues to back gold’s strength. The Dollar’s sharp rebound is widely viewed as a short-covering move, and many believe recent losses were excessive. If Dollar momentum stalls, gold could resume its upward path. Meanwhile, markets are also closely watching the Bank of Japan’s upcoming policy decision and renewed optimism around U.S.-China trade talks. Together, these developments could impact currency markets and influence gold’s direction. Despite broader challenges, the metal’s resilience highlights persistent demand. Any weakness may present a new entry opportunity.
 

Gold Extends Rally within Well-Defined Rising Channel

The gold chart below shows a decisive breakout followed by a steady upward trend. After an extended period of consolidation beneath resistance, gold broke out sharply to new highs. Between 2020 and 2023, a key resistance zone acted as a ceiling for gold prices. Once that level was breached, gold surged sharply, confirming the breakout and shifting the technical outlook in favour of bulls.
 

(Click on image to enlarge)

Consequently, this breakout led to the formation of a well-defined ascending channel. Since then, gold has continued to trade within the rising channel, with pullbacks consistently bouncing off the lower trendline. At the same time, the upper trendline has served as a reference point for bullish targets, often attracting strong upward moves. Additionally, gold is trading close to the channel’s mid-line, which has become an essential guide for maintaining steady upside momentum.

Furthermore, the trend’s strength is confirmed by a steady formation of higher highs and higher lows. Although gold has seen a minor pullback from its recent record high, it continues to hold above former resistance levels that have now turned into support. In addition, price action remains well contained within the rising channel. As long as the price holds above these key technical levels, the broader uptrend stays intact. If bullish momentum continues, the next leg could target the upper boundary of the channel. Conversely, any pullback within the lower half of the structure may offer a fresh entry point for long-term buyers.
 

Gold Outlook: Strong Technicals and Steady Demand Support Further Upside

Gold continues to show strength despite mixed signals from the Fed and stronger U.S. data. In particular, strong technical structure and persistent buying interest have kept momentum intact. Every brief decline has held above key structural levels. Additionally, with ongoing global uncertainty and shifting policy signals, gold continues to maintain its broader uptrend. However, if bullish momentum continues, gold could advance toward the upper boundary of its ascending channel. To receive gold and silver trading signals and premium updates, please subscribe here.

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