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Gold price (XAU/USD) has gained strong momentum, extending its recent upward trend. This rally comes after a sharp decline, during which the precious metal touched a one-week low. Market participants remain cautious due to ongoing geopolitical tensions and economic uncertainties linked to US President Donald Trump's trade policies. The demand for safe-haven assets like gold continues to rise as investors seek protection from volatile market conditions.

Gold Price Boosted by Weak US Dollar and Economic Concerns

Investors are closely monitoring the impact of US trade tariffs and the Federal Reserve's potential interest rate cuts. Trump's administration has imposed tariffs on global steel and aluminum imports, which has sparked concerns about a slowdown in US economic growth. Market fears of a recession have grown significantly. Signs of a weakening labor market have further fueled speculation that the Fed may resume rate cuts by mid-year. This has pushed US Treasury yields lower, weakening the US Dollar and making gold more attractive to investors.

Additionally, geopolitical concerns continue to support gold prices. The meeting between Ukrainian President Volodymyr Zelenskyy and Trump resulted in the suspension of US military aid to Ukraine, further heightening tensions. Moreover, a significant escalation in the Russia-Ukraine conflict was seen as Ukraine launched a record number of drone attacks on Moscow. These events have increased risk-aversion sentiment, driving investors towards gold.

Technical Analysis of Gold Price Trend

The gold price chart shows an ascending channel pattern, indicating a strong bullish trend. The price has consistently respected the channel’s support and resistance levels. Recent movements suggest that gold remains within the channel, with a potential target of $3,030 if the bullish momentum continues.

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The lower boundary of the channel acts as strong support, preventing significant price drops, while the upper boundary around $3,030 serves as a potential resistance level. The latest candlesticks indicate that gold has rebounded from the middle line of the channel, suggesting continued bullish pressure. The consistent higher highs and higher lows confirm the ongoing uptrend. Any correction towards $2,850 could offer a buying opportunity, provided the channel support remains intact.

Traders will keep a close watch on upcoming US economic data, particularly the Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which could impact the USD and further influence gold’s trajectory. If inflation data remains strong, gold might see increased volatility as market expectations around Fed policy shift.

Conclusion

In conclusion, gold’s rally is supported by global economic uncertainty, weaker US Treasury yields, and persistent geopolitical risks. The ascending channel pattern suggests further upside potential, with a key resistance level to watch. Investors should remain cautious and track key economic indicators for further confirmation of the trend. To receive gold and trading signals, please subscribe here.

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