Today’s analysis offers a comprehensive overview of the gold market, highlighting both fundamental and technical factors influencing current trends. This report is designed to provide investors with the insights they need to navigate the market with confidence.
A weekend trade agreement between the US and the European Union added to the optimism sparked by the earlier US-Japan deal, helping to ease concerns over a global trade war. Further boosting sentiment, top US and Chinese officials are set to resume negotiations on Tuesday to address longstanding economic disputes and extend the current truce for another three months. As a result, market attention is firmly fixed on the outcome of the two-day FOMC policy meeting beginning Tuesday. While the US central bank is widely expected to keep interest rates unchanged on Wednesday, investors will closely analyze the accompanying statement and Fed Chair Jerome Powell’s remarks for new signals on the policy outlook.
The daily chart of spot gold reveals a symmetrical triangle pattern, suggesting ongoing consolidation and the potential for a breakout. XAU/USD continues to struggle near triangle resistance, with bulls needing a decisive move above the Fibonacci retracement level of the April low-to-high rally, around $3,362, to challenge the key psychological barrier at $3,400. A breakout above this zone could reignite bullish momentum, bringing the June high of $3,452 into focus and potentially paving the way for a retest of the all-time high at $3,500. On the technical front, the short-term Stochastics Oscillator sits at 21, while the Relative Strength Index (RSI) holds at 44, reflecting a lack of strong momentum for now.
Stochastics Oscillator: Measures momentum by comparing the closing price to its price range over a set period. Readings above 80 indicate overbought conditions, while readings below 20 suggest the asset is oversold.
Relative Strength Index (RSI): Evaluates the speed and magnitude of recent price changes to identify overbought or oversold conditions. A value above 70 signals overbought, while below 30 indicates oversold levels.
In the dynamic and constantly evolving bullion market, staying informed through both technical and fundamental analysis is essential for sound investment decisions. This report aims to offer a balanced perspective to help investors navigate the complexities of gold trading with greater confidence.