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Gold has always played a crucial role as a hedge in times of economic and geopolitical uncertainty. Over the past several months, the price of gold has seen dramatic movements, driven by a mix of macroeconomic conditions, central bank policies, and geopolitical tensions. Gold currently holds steady above $3,300, reflecting strong investor interest despite mixed signals from global markets. The chart provided offers an in-depth technical view of gold’s long-term trend, revealing a classic bullish breakout pattern. As global markets digest developments in trade negotiations and policy signals, the gold market reflects investor sentiment with heightened volatility.
 

Uncertain Trade Policies and Fed Outlook Shake Gold Markets

Gold remains under pressure as signs of easing trade tensions reduce safe-haven demand. China's move to exempt certain US goods from tariffs signals a willingness to resolve trade disputes. US officials also express optimism, further supporting risk-on sentiment in global markets. This shift reduces investor interest in gold, which thrives during geopolitical uncertainty.

The US Dollar gains strength as investors buy into expectations of trade progress and economic resilience. A stronger USD typically weighs on gold since it makes the metal more expensive for holders of other currencies. However, concerns over President Trump's unpredictable trade policy still create uncertainty, keeping some support under the gold price.

Markets now look toward the Federal Reserve’s next moves. Traders expect rate cuts to resume by June. Lower interest rates reduce the opportunity cost of holding gold, which pays no yield. If inflation data or job reports disappoint, the Fed may ease more aggressively. This could support gold in the medium term despite current weakness.
 

Technical Analysis: Cup and Handle Breakout Confirms Bullish Gold Trend

The weekly chart for gold shows a "Cup and Handle" formation spanning several years. This bullish continuation pattern begins forming in mid-2020, where the price initially peaks and then enters a prolonged period of consolidation, forming the rounded base of the cup. The handle forms in late 2023 as a shallow pullback before a strong upward breakout.

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The breakout point occurs in early 2024 when gold decisively closes above the $2,070 resistance level, previously tested in 2020 and again in 2022. This breakout confirms the bullish pattern and is followed by strong upward momentum. A "Buy" signal was triggered at this stage, supported by increasing volume and positive sentiment.

Following the breakout, gold moves into a strong upward trend, which is called “surge mode.” The price rapidly accelerates and breaches multiple psychological levels, surpassing $3,300 by April 2025. The steep angle of ascent after the breakout signals strong institutional buying and safe-haven demand.

The breakout from the cup and handle pattern suggests that gold could go even higher in the long run. This target is estimated based on how deep the cup shape is. The pattern suggests sustained bullish interest as global markets reconsider economic risks and monetary policy expectations.
 

Conclusion

Gold price (XAU/USD) recovers slightly from near the $3,300 mark but holds onto intraday losses amid signs of progress in tariff negotiations. Furthermore, investors remain hopeful over the potential de-escalation of trade tensions between the US and China, which is seen undermining the safe-haven precious metal. Apart from this, the emergence of some US Dollar (USD) buying turns out to be another factor weighing on the commodity. Trump's rapidly shifting stance on trade policies has been received poorly by investors and adds to a layer of uncertainty in the market. Moreover, prospects for more aggressive policy easing by the Federal Reserve (Fed) could cap the USD and lend support to the non-yielding Gold price. Traders might also opt to wait for this week's US macro releases, including the Fed's preferred inflation gauge and the Nonfarm Payrolls (NFP) report. These data points could influence positioning for the next leg of a directional move. 

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