📈 GOLD // entering the expansion phase
Last clean daily breakdown taken, long expansion phase is valid
Key Chart (DAILY)
The trend is long on all the major timeframes, and the highest clean daily breakdown is broken with a significant Marubozu candle.
The targets are valid until the daily waves are broken.
Key Fundamentals: Gold (XAU/USD)
Summary
Gold prices are balancing between headwinds from elevated interest rates and tailwinds from central bank buying and geopolitical uncertainties. Analysts foresee a tight trading range in the short term but highlight its long-term role as a hedge against inflation and economic instability.
Key Factors
• Interest Rate Pressure: Kitco notes that the Federal Reserve’s commitment to higher-for-longer interest rates increases the opportunity cost of holding gold, limiting its upside potential.
• Central Bank Demand: According to World Gold Council, central banks, particularly in China and Turkey, have been significant buyers, supporting prices amid geopolitical uncertainties.
• U.S. Dollar Influence: Analysts at Bloomberg emphasize gold’s inverse correlation with the U.S. dollar, which has strengthened on robust U.S. economic data but could weaken if the Fed signals policy easing.
• Supply-Side Dynamics: Reuters highlights a modest increase in mine production, which remains insufficient to offset surging central bank demand.
Actionable Insights
• Outlook: Gold is likely to trade in a range until clearer signals emerge from the Federal Reserve. Continued central bank purchases and a potential weakening of the U.S. dollar may provide medium-term support.
• Recommendation: Long-term investors should consider gold as a hedge against macroeconomic risks and inflation. For short-term traders, monitor U.S. economic indicators and Federal Reserve updates for actionable price moves.