Image Source: Pixabay
 

Gold (XAUUSD) is gaining traction as global risks resurface and economic uncertainty grows. Investors are responding to political gridlock in the U.S., weak data from China, and renewed trade tensions. At the same time, shifting Fed expectations and a softer Dollar are supporting safe-haven demand. These developments have pushed gold higher after a brief pullback, with technical patterns signalling further upside potential.

Gold Gains Momentum as Political Gridlock, Weak China Data, and Trade Frictions Deepen Global Uncertainty
 

Gold is finding support after a brief pullback, with price action showing signs of renewed strength. Market sentiment remains cautious as the U.S. government shutdown risks becoming the longest on record. The political deadlock has disrupted the flow of key economic data, increasing uncertainty and enhancing gold’s appeal as a safe-haven asset. Meanwhile, China’s private manufacturing sector showed unexpected weakness. The Caixin PMI fell to 50.6 in October from 51.2 in September. The decline has added to broader concerns over slowing global growth.

Consequently, Trump’s decision to tighten export controls on high-end semiconductors sparked fresh concerns over trade friction. He plans to block China from acquiring Nvidia’s most sophisticated semiconductors, escalating trade tensions. His remarks revived U.S.–China trade tensions, which had temporarily eased following last week’s APEC meeting. With risk appetite declining, investors are turning back to gold, driving a fresh wave of safe-haven flows into the metal.

Meanwhile, markets are starting to challenge the Federal Reserve’s cautious positioning. The Fed’s decision to cut rates last week offered limited reassurance to markets. This led to a notable drop in December cut expectations. At the same time, the Dollar has eased from recent highs as economic uncertainty deepens across global markets. These conditions have strengthened gold’s role as a reliable store of value in today’s volatile environment.

Gold Strengthens After Triangle Breakout and Key Support Retest
 

The gold chart below shows a breakout from a well-formed triangle that developed over several months. The triangle served as a base structure, compressing price action ahead of the breakout. Once the price moved decisively above the upper boundary, momentum accelerated sharply. This breakout confirmed the end of consolidation and triggered a strong upward leg supported by volume.
 

After the breakout, price action evolved into an ascending broadening wedge. This wedge is a bullish continuation pattern, often seen in strong uptrends. As the price expanded within the rising wedge, each correction became shorter, highlighting persistent buying interest.
This broadening pattern suggests heightened volatility, a common feature in the later stages of a trend.

Recently, gold pulled back to retest the lower boundary of the wedge. The red circle on the chart marks this key intersection zone. This move touches the upward-sloping trendline from the triangle, highlighting a major area of technical support. Price responded positively after touching this level, suggesting the uptrend remains intact. A sustained bounce from this area increases the likelihood of a move back toward recent highs.

Gold Outlook: Global Risks and Technical Strength Point to Further Upside
 

Gold remains well-positioned for further gains as global risks continue to mount and technical support holds firm. The combination of political gridlock, weakening economic data, and renewed U.S.–China trade tensions has revived safe-haven demand. At the same time, markets are starting to price in a shift in Fed policy, adding pressure on the Dollar. Price stability above the key trendline indicates continued strength in the broader uptrend. If momentum continues to build, the price could retest recent highs and potentially extend the rally. 

More By This Author:

Gold Pauses Near Resistance As Market Digests Fed And Trade Headlines
Gold Holds Gains As Trump–Xi Meeting And Fed Outlook Shape Market Sentiment
Gold Pulls Back As US-China Trade Optimism And Softer Inflation Weigh On Safe-Haven Demand