Gold regained traction amid rising concerns over US fiscal deficit

Gold prices gained traction heading into the early Asian session on Monday as investors turned to the safe-haven asset after Moody's gave a blow to Washington on Friday by stripping it of its highest credit rating of triple-A and downgraded it by one notch to AA1, citing economic concerns like widening fiscal deficit. The US debt-to-GDP ratio is at 124% in 2025, exceeding 100% which reflects the country's total debt is larger than its economic output. The rating agency expressed concerns over the nation's rising pile of debt which now stands at $36 trillion which could amplify due to Trump's plan to cut taxes and lack of effective policy action. 
Furthermore, cooler inflationary data released from the US raises the odds for rate cuts, exerting pressure on the greenback and lifting Gold up.

XAU/USD TECHNICAL OVERVIEW

Technical Structure: From the technical perspective, Gold remains under pressure as reflected by a Bearish Candle on Weekly. However, a sharp rebound on Thursday from a low of $3120 at the 55-DSMA  has kept the metal buoyant. The Daily chart showcases the formation of Bearish Flag coupled up with a Double Top on the 4-Hour timeframe, indicating bearish momentum. Prices face strong rejection at the 200-SMA on 4-Hour and if they sustain above it, Gold might continue its trajectory in the upward direction. 

Intraday Trend/ Intraday Strategy: The intraday bias remains Neutral to Bullish and favours the approach of Buying on Supports and Selling near Resistance levels.

Weekly Trend: Neutral

Major Support: 3206, 3197, 3184

Major Resistance: 3224, 3231, 3249