GOLD Analysis
Afternoon: Gold Holds near $3,330 Amid Trade Policy Shifts, Fed Caution, and Overbought Technicals
Highlights:
- Gold has rallied over 20% this year as trade tensions dampen growth prospects and erode confidence in safe‑haven US assets like Treasuries.
- Continued ETF inflows and central bank accumulation bolster the bullion outlook.
- Goldman Sachs raised its year‑end forecast to $3,700 and sees potential for $4,000 by mid‑2026.
Overview:
Gold prices remained elevated above $3,330 per ounce as investors sought safe‑haven assets in response to ongoing U.S. trade policy uncertainty and a cautious Federal Reserve. Despite mixed tariff signals—from probes into semiconductor and pharmaceutical imports to delayed auto levies and suspended electronics duties—the net effect has been heightened market anxiety, supporting gold’s rally.
Trade Policy Developments
- The U.S. Commerce Department launched inquiries into the national‑security impact of semiconductor and pharmaceutical imports, laying groundwork for possible tariffs.
- These investigations followed announcements of a 90‑day delay for proposed auto tariffs and a halt on planned duties for various tech products.
- Each fresh policy twist has spurred volatility and safe‑haven buying in gold.
Monetary Policy Outlook
- Fed Chair Jerome Powell reiterated that the central bank will wait for clarity on trade‑related economic impacts before adjusting rates.
- Powell warned that tariffs could push up consumer prices and slow GDP growth—factors that typically delay rate hikes and boost gold by lowering real yields.
Technical Analysis
- Momentum & Overbought Conditions: The RSI has spiked to 85.87, entering extreme overbought territory reminiscent of 2020 peaks—suggesting caution for any near‑term buyers.
- Support & Resistance: International gold support sits at $3,305 and resistance at $3,360, while MCX levels are ₹95,100/₹96,100. An additional technical trigger: only fresh long positions above $3,312, targeting $3,383, with immediate support at $3,290.
- Bullish Trend: Despite overbought readings, gold remains in a strong uptrend—trading near its upper Bollinger Band, above all EMAs, and with a positive Supertrend.
Upcoming Economic Catalysts
- Euro Zone: German PPI m/m, ECB refinancing rate decision
- United States: Unemployment Claims, Philly Fed Manufacturing Index, Building Permits
These releases could sway risk appetite and real‑rate expectations, triggering further moves in gold.
Trading Strategy
- Given heightened volatility and extreme RSI readings, exercise caution and avoid chasing highs.
- Consider buying dips near support zones ($3,290 internationally; ₹95,100 on MCX), or on a break above $3,312 for measured entries targeting $3,383, while monitoring tariff and Fed developments closely.