Gold prices (XAU/USD) struggled to find meaningful support on Wednesday, fluctuating between modest gains and small losses during the Asian trading session. The US dollar attracted buyers for a second consecutive day following mostly upbeat US macroeconomic data released on Tuesday. Positive momentum in stock markets also acted as a headwind against the precious metal, which typically benefits from risk-off environments.
Uncertainties Keep Gold Bears Cautious
Despite some optimism, uncertainty surrounding US President Donald Trump’s trade tariffs and geopolitical risks tempered market sentiment. Additionally, concerns over the deteriorating US fiscal situation and expectations of further Federal Reserve rate cuts in 2025 could limit significant dollar gains and, in turn, support non-yielding gold prices.
These factors prompted bearish traders on gold to remain cautious, carefully positioning ahead of potential further declines.
Technical Analysis: Key Levels to Watch
Bearish Signals and Support Zones
From a technical standpoint, gold’s overnight break below a short-term ascending trendline is a key bearish trigger. If gold prices fall below the 200-period simple moving average (SMA) on the 4-hour chart and the critical $3,300 support level, it would reaffirm a bearish trend.
However, daily chart oscillators, although showing waning momentum, have not yet fully confirmed a bearish outlook. This suggests that any further decline could attract buying interest near the $3,250–$3,245 horizontal support zone. A breach below this level could open the door to more pronounced downside for gold in the near term.
Resistance and Potential Bullish Triggers
On the upside, the momentum from the Asian session high near $3,315–$3,316 currently faces resistance around the $3,340–$3,345 range. This resistance aligns with the recent breakpoint of the ascending trendline.
A decisive break above this resistance could trigger short-covering rallies, potentially driving gold prices to revisit the two-week highs around $3,365–$3,366 reached last Friday.
If gold manages to sustain a strong breakout above this area, it would signal a new bullish trigger, likely propelling prices to reclaim the $3,400 mark and potentially climb further towards the next significant resistance near $3,465–$3,470.
In summary, gold is caught in a tug-of-war between USD strength and risk sentiment on one side, and geopolitical and fiscal concerns on the other. Technically, key support around $3,250 and resistance near $3,345 will be pivotal in defining the near-term direction of gold prices.
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