Gold prices (XAU/USD) skyrocketed for the second consecutive day. Specifically, it traded up 4.5 percent from Wednesday’s open, hitting a one-week high during the Asian session on Thursday. The precious metal shot up to over $3,377-3,378. This surge was largely driven by safe-haven demand as geopolitical tensions were escalating and with a weaker U.S. dollar. Traders are uncomfortable with a very foggy economic picture. Gold is positioned for more increases, as positive signals lead gold to a predicted rise toward the key $3,400 threshold.
Gold is ripping – literally and figuratively Gold prices are on sensational upward trajectory. That momentum is supported by favorable daily and hourly oscillators. Analysts expect to see this momentum continue with even greater returns. Today’s market is highly sensitive and responsive to real-time changes in the geopolitical landscape. These safe-haven flows have intensified recently with the U.S. Consumer Price Index (CPI) showing signs of softening. This change makes immediate interest rate increases by the Federal Reserve less likely, lowering the dollar and increasing gold’s appeal.
Increasing geopolitical tensions in the Middle East have traders flocking to safe-haven assets. That change is one of the major underlying reasons driving gold towards its all-time highs. U.S. President Donald Trump’s renewed tariff threats have added to market anxiety, driving investors toward gold as a secure investment option. Given all of these factors, the underlying picture looks increasingly positive for gold price bulls.
As they decide the market’s divine direction, traders are eyeing support and resistance levels. Support for gold is very heavy right here at the $3,300 level. This partial retracement level happens to align with the 200-period Simple Moving Average (SMA) on the 4-hour timeframe. This key support level provides a solid buying opportunity for investors seeking to profit from additional backsliding.
Strong resistance is seen clustered near the $3,350-3,348 zone, which should shelter the short-term upside. Should gold manage to sail over this ceiling of resistance, analysts are forecasting it could aim for its historical high of over $3,500. This psychological milestone hadn’t been crossed since last April.
Traders are treading lightly ahead of what could be a market-moving U.S. economic docket this week. Important data including the Producer Price Index (PPI) and Weekly Initial Jobless Claims have the potential to provide a major lift to gold prices. Still, these macro conditions are so favorable to gold that each new macro data can only add credibility to gold’s bullish trend.
The one-two punch of higher geopolitical risks and a less hawkish economic picture has created a perfect storm for gold prices. Positive technical indicators signal a hopeful future for gold. Combined with a favorable fundamental backdrop, that sets the stage for buyers to remain active in the near term. According to a new survey from Bloomberg analysts, indeed outlook for gold prices still looks to be path of least resistance firmly toward the upside.