Gold’s price analysis is maintaining its upward trend, surging nearly 1% on Wednesday. This marks its fifth consecutive day of gains, accumulating over 2.5% in weekly growth. The precious metal has reached new all-time highs near $2,877 as investors seek safety in gold. Economic uncertainty in the United States (US) and expectations of a Federal Reserve (Fed) rate cut are driving this demand. Additionally, easing trade tensions are contributing to gold’s continued rise.
Economic Data Impact on Gold Prices
The upcoming US economic data could provide further support for gold price analysis bullish momentum. On Wednesday, the January Purchasing Managers Index (PMI) data is set to be released. A weaker-than-expected PMI reading may push gold to fresh highs.
Market Sentiment Driving Gold Higher
Investors are shifting funds into gold price analysis, moving away from technology stocks and shielding themselves from falling US yields. According to Bloomberg, inflation concerns are also diminishing, adding to gold’s appeal.
- At 14:45 GMT, S&P Global will publish the final PMI reading for January.
- At 15:00 GMT, the Institute for Supply Management (ISM) will release its services sector PMI:
- The PMI is anticipated to rise to 54.3 from 54.1 in December.
- The Prices Paid component stood at 64.4 in the last reading, with no projected forecast.
- The CME FedWatch Tool indicates an 83.5% probability of unchanged interest rates at the Fed’s March 19 meeting. However, there is a 16.5% chance of a 25 basis points rate cut.
Technical Analysis: Gold’s Strong Uptrend
Gold remains a preferred investment as markets reopen following the Chinese New Year holidays. Chinese traders are expected to drive further demand, reinforcing gold’s strength. Given the absence of significant historical reference levels, intraday Pivot Points will play a crucial role in technical analysis.
Key Support and Resistance Levels
- Support Levels:
- Pivot Point: $2,831
- S1 Support: $2,818
- S2 Support: $2,793, aligning with the October 31, 2024 high of $2,790
- Resistance Levels:
- R2 Resistance: $2,869
- Further Resistance: $2,880 and $2,900
- Analysts predict an extended rally toward $3,000
Conclusion
Gold’s upward momentum remains strong as investors prioritize safe-haven assets. With softer US economic data and a potential Fed rate cut, gold’s bullish trend is likely to continue. Technical indicators highlight key levels for traders, with $2,900 in sight and possible further gains ahead.
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