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Gold is climbing again after dipping in recent days during last week’s sharp market selloff. As global markets begin to recover, the yellow metal has rebounded and now trades just above the $3,000 level. A mix of technical signals and rising geopolitical risks support the uptrend. The main geopolitical driver is the rising trade war between China and the United States. Former President Donald Trump’s threat to hike tariffs by 50% has reignited fears of global instability. Meanwhile, technical analysis is also giving clear signals of where gold might go next.

Geopolitical Risks and Rate Cut Expectations Push Gold Higher in 2025

Gold prices are rising due to a mix of economic and political factors. One key reason is the escalating trade conflict between the US and China. Former President Donald Trump’s latest threat of a 50% tariff on Chinese goods has raised fears of a deeper economic rift. In response, China has promised to “fight to the end.” This uncertainty is pushing investors toward safe-haven assets like gold. The move away from riskier investments has also helped boost gold demand.

Another strong driver is the shifting outlook for US interest rates. Traders now expect the Federal Reserve to cut rates multiple times in 2025. This sudden change from a one-rate-cut scenario to as many as five reflects market anxiety. Lower interest rates reduce the opportunity cost of holding gold, which does not yield interest. As a result, gold becomes more attractive. The weakening US dollar, following falling Treasury yields, is further fueling gold’s upward momentum.

Gold Technical Outlook: Bullish Trend Meets Short-Term Reversal Signal

While the longer-term chart remains bullish, short-term signals hint at caution. The weekly chart below shows that gold has reached the upper boundary of a secondary ascending channel. This smaller channel started forming in 2022 and gained strength in late 2023.

At this critical point, a bearish hammer candlestick has emerged. This pattern forms when buyers push the price to new highs, but sellers regain control by the close. This indicates the potential exhaustion of bullish momentum.

The bearish hammer appears exactly at the upper boundary of the steeper channel. This adds weight to the possibility of a short-term pullback. Traders often treat such signals as warnings that a correction may follow, especially when supported by overbought indicators.

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Still, even a pullback would likely be a buying opportunity. The previous breakout zone near $2,070–$2,100 may now act as strong support. If gold retests that area, bulls might reload for a new leg higher.

Adding to the bullish narrative is the shift in the macroeconomic outlook. Markets now expect aggressive rate cuts, and that weakens the US dollar. A softer dollar tends to support gold prices. On top of that, continued geopolitical friction between the US and China acts as a catalyst for safe-haven demand.

Conclusion

Gold’s rise above $3,000 reflects both a technical breakout and rising global uncertainty. The long-term bullish structure remains intact, backed by a multi-year ascending channel and a confirmed breakout pattern. However, the recent bearish hammer near channel resistance warns of a short-term pullback. Macro factors like potential rate cuts and trade tensions with China continue to support gold’s long-term upside. Traders should watch for corrections as opportunities rather than threats in this evolving bullish trend. 

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