Gold tests the Top – Breakout from Descending Broadening Wedge on Watch

Gold extended its gains for the third consecutive session on Friday, climbing above the $3,340 mark and trading close to the weekly high. The rally is largely fueled by safe-haven demand amid escalating global trade tensions, following US President Donald Trump's latest tariff threats. Despite a stronger US Dollar, risk-off sentiment remains the dominant driver, as investors seek protection from market uncertainty, boosting gold’s appeal.

Meanwhile, the upside momentum in gold remains resilient despite reduced expectations for an immediate Fed rate cut. While traders have dialed back rate cut bets due to fears that tariffs could stoke inflation, the non-yielding metal continues to attract buyers. A firm dollar has had limited impact on gold’s bullish bias, suggesting that geopolitical fears are outweighing monetary concerns in the short term.

XAU/USD TECHNICAL OVERVIEW 

Technical Structure: Gold is currently testing the weekly high at the resistance level of descending broadening wedge it has been consolidating in. On the daily chart, price action is contained within a bearish inside bar, signaling short term indecision, while it also continues to trade just below the 20-day SMA, indicating resistance pressure. However, the 4-hour chart shows consolidation and the 1-hour timeframe has formed a bullish flag pattern, suggesting a potential continuation of the recent upward move if breakout levels are cleared.

Weekly Trend: Neutral

Intraday Trend/ Intraday Strategy: The intraday bias remains bullish and favours the strategy of Buying on Breakouts and Buying on Dips

Major Support: 3328, 3300, 3290
Major Resistance: 3345, 3360, 3370