Gold extends rally, marks record high on Fed policy hopes

Gold buyers remain in control despite a slight pullback from record highs, supported by dovish Fed expectations, ongoing Russia-Ukraine tensions, and continued central bank demand from China. Weak US jobs data, with NFP rising only 22,000 and unemployment hitting 4.3%, has cemented expectations of a 25 bps Fed rate cut this month. Russia’s largest air strike since the war began and China’s 10th straight month of gold purchases further underpinned safe-haven demand.

However, caution emerged as the US Dollar rebounded, driven by a sharp surge in USD/JPY after Japan’s Prime Minister resigned, sparking political instability. Concerns over slowing Chinese imports also weighed on gold’s upside. Traders now await key US CPI and PPI data later this week, which could determine whether the Fed opts for a larger rate cut.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: The daily chart highlights a Three White Soldiers pattern, reinforcing bullish momentum, with price action holding above the 20SMA. On the lower timeframes, Gold is forming a bullish flag on both the 4H and 1H charts, signaling potential continuation if resistance levels break.

Weekly Trend: Bullish

Intraday Strategy: Buy on breakouts above resistance or accumulate on dips near key support zones.

Key Levels:
Support: 3628, 3600, 3578
Resistance: 3655, 3700, 3720