Gold surges as three key factors drive prices higher

Key drivers behind Gold’s surge

At least three major factors are supporting Gold's rapid ascent:

1.      Geopolitical tensions – The ongoing deterioration in US-China relations, mainly due to the imposition of trade tariffs on Chinese imports, has heightened demand for safe-haven assets like Gold.

2.      Global monetary policy expectations – Investors anticipate that the US Federal Reserve will cut interest rates, which weakens the US dollar and makes Gold more attractive as an alternative investment.

3.      Central bank demand – Many global central banks, including China’s, are actively increasing their Gold reserves, providing strong demand support for the metal.

The ongoing weakness in the USD has further amplified Gold’s bullish momentum.

Technical analysis of XAU/USD

On the H4 chart, XAU/USD found support at 2,865 USD and extended its growth wave to 2,909 USD. The market is now likely to consolidate around this level. A downward breakout from this range could trigger a corrective move back to 2,865 USD. However, if the price breaks upward, the growth wave could extend to 2,920 USD, with further potential to 2,960 USD. The MACD indicator confirms this scenario, with its signal line above zero and pointing sharply upwards, indicating strong bullish momentum.

On the H1 chart, XAU/USD corrected to 2,865 USD before finding support and forming a new uptrend towards 2,909 USD. The price is now consolidating around this level. The next target will be 2,920 USD if it breaks upwards, followed by a potential extension to 2,960 USD. A short-term decline to 2,909 USD is possible before another upward move. The Stochastic oscillator supports this view, with its signal line above 80, preparing for a minor correction towards 50 before the next leg higher.

Conclusion

Gold continues to benefit from geopolitical tensions, Fed rate cut expectations, and strong central bank demand. While minor pullbacks may occur, the overall trend remains bullish, with key upside targets at 2,920 USD and 2,960 USD. Investors will closely watch further developments in US-China trade relations and any signals from the Federal Reserve regarding monetary policy, as these will shape the next major move in Gold prices.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.