Photo by Dmitry Demidko on Unsplash
 

Gold (XAUUSD) is gaining strength as soft U.S. inflation data, central bank uncertainty, and rising geopolitical tensions drive safe-haven demand. Weaker CPI readiongs have boosted expectations for Federal Reserve rate cuts, weakening the dollar and lifting gold’s appeal. At the same time, political instability and global unrest are amplifying defensive positioning. This combination of macro catalysts is fueling bullish momentum in gold.

Gold Strengthens on Soft CPI, Fed Uncertainty, and Rising Geopolitical Tensions
 

Gold is pushing toward new highs as softer inflation data and geopolitical tensions continue to fuel bullish momentum. The recent U.S. Consumer Price Index (CPI) report has provided critical support to gold’s momentum. Core CPI came in softer than expected, strengthening the case for additional rate cuts from the Federal Reserve in the coming months. This shifting policy outlook continues to strengthen gold’s appeal as a non-yielding, defensive asset.

Meanwhile, political uncertainty surrounding the Federal Reserve is adding to gold’s appeal. A criminal investigation involving Fed Chair Jerome Powell has raised fresh doubts over central bank independence. Remarks from former President Donald Trump questioning the Fed’s impartiality have added to the growing uncertainty. This backdrop is driving demand for gold as a defensive hedge.

Global developments are also playing a significant role. Ongoing unrest in Iran, including a harsh crackdown on demonstrators and restricted internet access, is heightening international tension. President Trump has issued strong warnings, suggesting possible intervention if violence escalates further. This geopolitical backdrop is keeping markets on edge and strengthening demand for safe-haven assets.

Gold Holds Within Rising Channel as Bullish Momentum Builds
 

The gold chart below shows two distinct ascending channels that reflect a strong and sustained bullish trend. The broader Ascending Channel 1 has guided the price action since early August, with gold consistently respecting the lower support boundary. In October, gold reached the upper boundary of this channel, forming a local top before retreating into a narrower structure.

After forming the October peak, gold transitioned into a narrower Ascending Channel 2 nested within the broader trend. This secondary structure has defined the recovery phase and supported a steady upward move since November. Price action has held firm, with repeated rebounds from the lower boundary pointing to strong dip-buying activity and sustained bullish momentum.

Currently, gold trades near the upper boundary of Channel 2, while also approaching the midline of Channel 1. A breakout from Channel 2 could trigger a retest of the broader upper resistance line near $5,200. If that level is breached, the larger channel structure points to a potential acceleration phase.

Gold Outlook: Policy Shifts and Global Risks Support Further Upside
 

Gold remains supported by dovish policy expectations, rising political uncertainty, and escalating global risks. The metal continues to build bullish momentum, with strong technical structures pointing to further upside. As markets price in rate cuts and brace for deeper instability, gold attracts sustained buying and appears poised for a potential breakout toward higher levels. 

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