Investorideas.com (www.investorideas.com
Newswire) a go-to platform for big investing ideas, including gold and
silver stocks issues market commentary from Rania Gule, Senior Market
Analyst at XS.com – MENA.
Gold appears today to be at a historic crossroads between continuing
its upward trajectory and a potential correction warning. While the
current moves represent a real opportunity for traders, the risk of a
bull trap remains high. Prices have approached roughly
$3,680–3,850 per ounce, after the yellow metal registered a
fresh all-time high near $3,681.63 on Monday, reflecting strong
underlying momentum. Gold is now consolidating in a narrow range near
these elevated levels, awaiting cues from central banks, particularly
the highly anticipated U.S. Federal Reserve decision on Wednesday.
I expect the Fed to cut interest rates by 25 basis points as widely
priced in, with a slim chance of a larger cut — though that is
unlikely at this stage given the mixed U.S. data: labor market signals
are softening, yet inflation remains somewhat sticky. If the Fed does
cut rates and Chair Jerome Powell delivers a cautious but dovish
message, gold could test the $3,700–$3,750 zone and potentially
push even higher, barring any upside surprises in inflation data or a
sudden rebound in the U.S. dollar.
Investors are also watching for the impact of other monetary policy
announcements this week: the Bank of Canada, the Bank of England, and
the Bank of Japan all have meetings that could disrupt gold’s
temporary consolidation. Any surprises — especially if the BoE
or BoJ adopt a more hawkish tone on inflation risks or growth concerns
— could lift the dollar and trigger capital flows away from
gold. In my view, the main risk is that gold could face a sharp
downside reaction if market sentiment turns risk-on or if U.S. data
beats expectations.
Geopolitical tensions continue to provide a solid floor for gold. The
ongoing conflict in Ukraine, Russian military actions, and Middle East
flare-ups are keeping gold supported as a safe-haven asset, prompting
investors to rotate out of riskier assets. This geopolitical backdrop
may shield gold from deep pullbacks even if short-term technical
corrections occur. However, it is worth noting that overbought
conditions on short-term charts signal a potential near-term pullback;
indicators such as RSI and EMAs show stretched momentum that could
trigger a pause or dip before a strong breakout.
In conclusion, I believe gold still has a favorable medium-term
outlook, with $3,700 as an initial upside target after the Fed
decision, and an extension toward $3,750–$3,800 not out of the
question if the policy guidance remains dovish. Still, traders must
remain agile: any indication from the Fed of a more cautious stance,
or unresolved inflationary pressure, could send prices back toward
$3,600–$3,650 as a strong support zone — or even lower in
the event of external shocks.
Ultimately, gold presents a strong but risky opportunity — only
disciplined traders and investors who manage risk carefully should
take positions here. Latecomers chasing the rally may find themselves
trapped at high levels. Now is the time to read the signals closely:
the Fed decision, other central bank policies, and upcoming economic
data will serve as the true catalysts for gold’s next major
move.
Technical Analysis of Gold ( XAUUSD ) Prices:
The four-hour chart of Gold/U.S. Dollar (XAU/USD) shows a strong
continuation of bullish momentum within a clear five-wave impulse
structure, with prices currently approaching the completion of the
fifth wave near the 3,700 level. The price has been moving within an
ascending channel since breaking the key support at 3,450 (0.65
Fibonacci retracement), indicating that buyers are in control of the
market in the short to medium term. Staying above the main moving
average further reinforces this bullish scenario and points to the
potential for testing new highs if the Federal Reserve’s
decision aligns with market expectations for a rate cut.
The technical momentum is supported by the Stochastic indicator, which
is still moving in positive territory despite approaching overbought
levels above 90 — a signal that may warn of a short-term
correction before any new bullish impulse. The key downside levels to
watch are $3,616 and $3,576, which represent major Fibonacci supports
and previous pivot points; a break below these could open the door for
a deeper correction toward $3,550 or even $3,480. However, holding
above these levels will keep the bullish bias intact, and any dip
toward them would likely be seen as a buying opportunity in line with
the broader uptrend.
On the upside, a clear close above $3,700 would confirm the completion
of the fifth wave and open the way to higher technical targets,
starting at $3,750 and potentially extending to $3,800 if dollar
weakness persists after the Fed’s rate decision. The optimal
strategy at this stage is to closely watch the price reaction near
$3,700: a strong breakout with high trading volume could be a buy
signal for targeting new highs, while a failed breakout might trigger
a healthy pullback before the uptrend resumes.
Support levels: $3,616 – $3,595 – $3,576
Resistance levels: $3,700 – $3,750 – $3,800
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