Today’s Gold Analysis Overview:
- Overall Gold Trend: Strongly bullish.
- Support Levels: $3620 – $3580 – $3530 per ounce.
- Resistance Levels: $3670 – $3695 – $3730 per ounce.
Today's Gold Trading Signals:
- Sell gold from the $3685 resistance level, with a target of $3540 and a stop-loss at $3710.
- Buy gold from the $3588 support level, with a target of $3680 and a stop-loss at $3540.
Technical Analysis of Gold Price (XAU/USD) Today:
The gold market reached an all-time high last week, as disappointing economic data gave the Federal Reserve the green light to resume its monetary easing cycle. However, investors are now trying to gauge how much of this easing is already priced into the bullion market. According to gold trading platforms, the price of gold rose to the $3674 per ounce resistance level, an all-time high, before closing the week stable around $3642 per ounce.
In addition to U.S. interest rate cut expectations, the gold market is reacting to the uncertainty surrounding U.S. monetary policy, as President Donald Trump and his administration continue to push for lower interest rates. According to trading experts, the significant weakness in the U.S. labor market and the increasing risk of recession mean that a new easing cycle could drive U.S. interest rates down by as much as another 100 basis points. However, the risk is that the Federal Reserve may overreact. The continuation of this confusion will support further increases in gold prices.
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Will Gold Prices Rise to $3700?
According to gold analysts, the current easing path of the U.S. central bank, represented by slight interest rate cuts, will continue to support gold's technical rise to $3700 per ounce. Considering the two-year bond yields, there is justification for the Federal Reserve to cut the federal funds rate by 100 basis points by the end of 2025.
Currently, there is a strong rationale for the Federal Reserve to surprise the markets with a 50-basis point interest rate cut, following updated labor market data that showed a sharp contraction in job growth. Recently, initial revisions to U.S. employment statistics have resulted in the loss of nearly one million jobs, a figure three times smaller than the ten-year average and the worst number ever recorded.
Taking into account the U.S. interest rate cut, any signals of further interest rate cuts beyond expectations through 2026 have not been factored into the gold market. This could lead to a significant rise in gold prices, potentially above $3700 per ounce.
What is expected for the US interest rate decisions?
In this regard, according to the CME FedWatch Tool, financial markets are only pricing in a 5% chance of a 50-basis point U.S. interest rate cut this week. Meanwhile, the Federal Reserve's updated economic projections in March showed a forecast of only two interest rate cuts next year. While cautious expectations are growing, some analysts suggest this could pose a risk to gold in the short term if these vague expectations are not met in Wall Street markets.
Meanwhile, the bullish scenario for gold prices remains the strongest. Although all technical indicators have reached strong overbought levels due to recent gains, the strength of the bullish factors for gold prices still suggests a move towards new all-time highs. The 14-day Relative Strength Index (RSI) is hovering around 77, crossing the overbought line. The MACD indicator, along with many other technical indicators, is also in the overbought zone. Therefore, it is important to note that the recovery of the US dollar could be a good reason to start profit-taking. Based on the technical correction and charts, if gold prices close above $3,650, they could retest the $3,675 and $3,700 levels. However, weakness below $3,650 could push prices towards $3,600 and $3,570 per ounce.
Trading Advice:
Traders are advised that any drops in bullion prices should be seen as buying opportunities, as diversification of reserve allocations continues and the Federal Reserve's independence continues to decline. Given the general technology of the yellow metal, price momentum could push prices to $3800 per ounce.
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.