Gold hovers at one-month low on fading Middle East tensions and trade war concerns

Gold rose 0.3%  to $3,296 per ounce on Monday, recovering some ground after a sharp 2.65% weekly decline driven by fading safe-haven demand. Optimism around global trade agreements, easing Middle East tensions, and a strong US equities rally have weighed on gold prices in recent sessions.

However, growing expectations of a July Fed rate cut, concerns over Fed independence, and a weaker US Dollar could support a new rally, according to analysts at Pepperstone. Lower interest rates typically enhance gold’s appeal as a non-yielding asset, while political pressure on the Fed may revive safe-haven buying.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: Gold prices posted a bearish weekly candle, reflecting broader market pressure over the past week. However, on the daily chart, prices have shown a notable bounce from the 3245 support zone, accompanied by a strong RSI bullish divergence, signaling potential recovery momentum. On the 1-hour timeframe, gold has broken out of a flag pattern, indicating short-term bullish momentum.

Weekly Trend: Neutral

Intraday Trend/ Intraday Strategy: For intraday trading, the strategy remains neutral with a focus on buying near support levels and selling near resistance. 

Major Support: 3278, 3270, 3260
Major Resistance: 3290, 3300, 3306