Gold prices recently surged to an intra-day high of 2942, driven by escalating trade tensions and consistent central bank purchases. Analysts Frances Cheung and Christopher Wong from OCBC highlighted that gold was last seen at 2892 levels. This upward trend reflects the growing demand for gold as a safe-haven asset.
Recent Breakout in Gold Prices
The recent spike in gold prices can be attributed to increased trade friction and central bank activities. For instance, China has been purchasing gold for the third consecutive month. This trend underscores the metal’s appeal during times of economic uncertainty.
Near-Term Retracement Likely
Despite the bullish momentum, a near-term retracement is possible. Federal Reserve Chair Jerome Powell’s recent testimony indicated no immediate plans to cut interest rates. Higher interest rates increase the opportunity cost of holding gold, which could temper its recent rise.
Technical Analysis and Support Levels
The daily chart shows bullish momentum, but the RSI has eased from oversold conditions. Key support levels are at 2860 and 2792 (21 DMA). Resistance levels are at 2942 (recent high) and 2960. Analysts recommend buying dips, maintaining a constructive outlook on gold.
Drivers Supporting Gold Prices
The potential increase in US debt could revive the de-dollarisation narrative, boosting gold demand. Additionally, central banks continue to purchase gold, providing further support. While monetary policy easing has slowed, it remains marginally favorable for gold prices.
Conclusion: Gold’s Outlook Amid Uncertainty
Gold remains a reliable asset amid global trade uncertainty and economic instability. Investors should monitor key support and resistance levels while considering the broader economic landscape. For more insights on gold trends, visit Daily Gold Signal. For daily updates on gold prices and market analysis, check out Daily Gold Updates.
