US$3,700 Resistance Will Determine Gold's Next Move
Global gold prices remained near record highs on Monday, as market expectations for a dovish Federal Reserve (The Fed) policy increased and demand for safe-havens surged amid global uncertainty.
Spot gold traded around US$3,690 per troy ounce, just slightly below the record high set last week. Market participants are now awaiting the release of US core inflation data (Core PCE) and statements from Fed officials, which will determine the direction of future monetary policy.
Expectations of additional interest rate cuts by year-end remain the main catalyst for gold. Falling real bond yields have lowered the opportunity cost of holding gold, while persistently high inflation has maintained investor interest in the precious metal as a hedge.
In addition to monetary factors, geopolitical uncertainty and gold purchases by central banks continue to support the upward trend. "As long as global uncertainty remains high, gold will struggle to lose its appeal," said a commodity analyst in Singapore.
Technically, gold is currently moving within a bullish consolidation range of US$3,600–US$3,700. The US$3,700–US$3,708 level serves as key resistance, which, if broken, could potentially push the price to US$3,750–US$3,800. Meanwhile, the US$3,640–US$3,650 zone serves as key support, and a drop below US$3,600 could trigger a deeper correction to the US$3,550 range.
With the short-term trend remaining positive, gold has the potential to continue strengthening if the US dollar weakens or the Fed signals a dovish stance. However, stronger-than-expected US economic data could be a turning factor that depresses the price of this precious metal.
Source: Newsmaker.id
