The cautious tone is reinforcing demand for safe-haven assets like gold, particularly as traders brace for potential economic fallout. The current pivot at $3028.53 is acting as a key short-term technical barrier. A break above this level could open the door for a retest of the all-time high at $3057.59, while failure to clear it may expose the downside to $2999.46 and potentially $2968.92.
Rate Cut Expectations Offer Structural Support
Expectations that the Federal Reserve could lower interest rates later this year continue to support bullion. Although the Fed left its benchmark rate unchanged last week, it signaled a willingness to ease policy by 25 basis points if inflation slows further. Traders are watching Friday’s release of the Personal Consumption Expenditures (PCE) data for clearer signals on future policy moves.
Lower rates reduce the opportunity cost of holding gold, which offers no yield, and have historically supported price rallies in bullion. Ricardo Evangelista of ActivTrades said the metal is likely to stay supported above $3,000, with dips being treated as buying opportunities.
Geopolitical Risk Remains in Focus
Developments in Ukraine continue to act as a geopolitical tailwind for gold. High-level meetings between U.S. and Ukrainian officials in Saudi Arabia follow discussions between the U.S. and Russia over a limited Black Sea ceasefire. The potential for further escalation or failed negotiations would likely drive fresh demand for gold as a geopolitical hedge.
Gold Prices Forecast: Cautiously Bullish
With strong support near $3,000 and growing expectations of a Fed rate cut, gold remains biased to the upside. However, resistance at $3028.53 must be cleared to regain momentum toward the record high of $3057.59. Unless risk sentiment improves materially or U.S. inflation surprises to the upside, the broader bias for gold prices remains bullish. Traders will likely treat dips as buying opportunities, especially ahead of key inflation data later in the week.