On Friday, gold prices surged to approximately 2,800 USD per ounce, achieving a new all-time high. This increase is primarily driven by investors seeking safe-haven assets due to renewed trade war concerns stemming from US President Donald Trump’s recent remarks. These comments have intensified worries about potential economic slowdowns and disruptions in global trade.
Primary Factors Behind Gold’s Historic Rise
Global monetary easing is contributing significantly to the rise in gold prices. Numerous major central banks have adopted more lenient monetary policies, increasing liquidity and keeping interest rates low, which enhances the attractiveness of non-yielding assets like gold.
- The European Central Bank (ECB) cut rates as anticipated, allowing for additional easing measures.
- The Bank of Canada (BoC) has paused its quantitative tightening efforts.
- Sweden’s Riksbank also implemented a rate cut earlier this week.
- Both the People’s Bank of China (PBoC) and the Reserve Bank of India (RBI) indicated a readiness to further ease their policies and inject more liquidity.
Meanwhile, the US Federal Reserve maintained its current interest rates this week, with market expectations leaning towards at least two rate cuts later this year.
Given these developments, gold is on track for its most substantial monthly gain since March 2024.
Technical Analysis
On the H4 chart, gold found support at 2,731 USD and proceeded to rise to 2,797 USD, creating a consolidation range around this price level.
- A downward break from this range may lead to a correction towards 2,772 USD.
- An upward break could initiate a growth wave towards 2,818 USD, with the possibility of extending to 2,839 USD.
This outlook is supported by the MACD indicator, which shows its signal line above zero and trending upward, signaling bullish momentum.
On the H1 chart, gold first established a consolidation range around 2,772 USD before breaking upward to 2,797 USD.
- A continuation of the rally towards 2,808 USD appears likely.
- After reaching 2,808 USD, a potential pullback to 2,777 USD (testing support) may occur.
- Post-correction, further increases towards 2,818 USD and potentially 2,839 USD are anticipated.
The Stochastic oscillator aligns with this XAU/USD outlook, with its signal line above 50 and gearing up for an upward move toward 80, suggesting additional upside potential.
Conclusion
The rapid ascent of gold prices underscores a growing inclination for risk-averse investments and ongoing global monetary easing. With central banks reducing rates and Trump’s trade threats causing market unease, demand for gold remains robust. Technical indicators point toward further increases, with key resistance levels at 2,818 USD and 2,839 USD; however, short-term corrections to 2,772 USD or 2,777 USD could represent buying opportunities before the uptrend resumes.
Disclaimer
The forecasts provided here reflect the author’s personal opinion and should not be interpreted as trading advice. RoboForex is not liable for any trading results based on the recommendations and analyses presented in this content.
