Gold prices have shown a sustained upward trend in recent months, as investors seek safe-haven assets amidst ongoing economic uncertainty. Recent developments in the U.S. economy have played a key role in shaping the price movements of gold, with market participants keeping a close eye on interest rates and economic indicators to gauge future price action.
Gold Price and Market Movers
Gold prices experienced a brief pullback but maintained strong gains for the week. As the price dipped below $2,900, traders took profits, marking a daily loss of 1.48%, with XAU/USD last seen trading at $2,883. Despite the decline, gold remained resilient due to weakening U.S. Treasury yields and a softer U.S. dollar.
The release of U.S. retail sales data revealed a sharp decline, which exerted pressure on the U.S. dollar. This created support for gold as investors adjusted their positions. However, industrial production in the U.S. showed improvement, somewhat offsetting the negative sentiment from the retail data.
Impact of Fed Rate Cuts and Economic Indicators
Expectations of Federal Reserve rate cuts further influenced the market. Investors have priced in multiple rate cuts in 2025, contributing to a decline in the U.S. 10-year Treasury yield, which fell to 4.472%. Lower yields typically support gold prices by reducing the opportunity cost of holding the non-yielding metal.
Another key factor influencing gold prices is central bank activity. The World Gold Council reported that central banks purchased over 1,000 tons of gold in 2024. This surge in demand was especially notable following Donald Trump’s electoral victory, highlighting continued strong demand for gold as a reserve asset.
Gold Price Technical Outlook
The technical chart for gold shows an ascending channel, which points to a strong bullish trend. The price consistently respects the support and resistance levels of the channel, with buyers in control as the market forms higher highs and higher lows. The midline of the channel serves as dynamic support and resistance. The bullish trend remains intact unless the price breaks below the lower boundary.
Recently, gold tested the upper resistance level but faced selling pressure. A pullback brought the price closer to the midline, where buyers attempted to regain control. The support held, suggesting that the bullish trend is likely to continue. Should gold break above recent highs, it could push toward new resistance levels. However, a break below the ascending channel would signal a potential trend reversal.
Conclusion
Gold continues to be in a strong uptrend, despite short-term pullbacks. Economic uncertainty, falling U.S. Treasury yields, and central bank demand are all supporting prices. Technical analysis shows that the bullish structure remains intact, with key support levels holding. If gold manages to break above $2,942, further gains are possible. However, a break below the ascending channel could signal a shift in momentum. Traders should monitor economic data and Federal Reserve policy for insights into the future direction of gold prices.