The cautious tone is to strengthen the demand for safe port activa such as gold, in particular because traders are braced for potential economic fall-out. The current Pivot at $ 3028.53 acts as an important technical barrier in the short term. A break above this level could open the door for a retest of all time of $ 3057.59, while it is not free that it can expose the disadvantage to $ 2999.46 and possibly $ 2968.92.
Rate reduction expectations offer structural support
The expectations that the Federal Reserve could lower the interest rates later this year continue to support precious metal. Although the FED left its bench market rate last week, it meant a willingness to alleviate the policy by 25 basic points if inflation is further slowing down. Traders look on Friday of the data of personal consumption expenditure (PCE) for clearer signals about future policy movements.
Lower rates lower the alternative costs of retaining gold, which does not offer any yield, and have historically supported price rallies in precious metal. Ricardo Evangelista from Activtrades said that the metal is probably supported above $ 3,000, where Dips is treated as buying opportunities.
The geopolitics risk remains in focus
Developments in Ukraine continue to act as a geopolitical headwind for gold. High-level meetings between American and Ukrainian officials in Saudi Arabia follow discussions between the US and Russia about a limited ceasefires of the Black Sea. The potential for further escalation or failed negotiations would probably stimulate a new demand for gold such as a geopolitical hedge.
Predict gold prices: Carefully Bullish
With strong support, almost $ 3,000 and growing expectations of a FED rate reduction, gold remains biased at the top. However, resistance at $ 3028.53 must be deleted to get the momentum back to the record high of $ 3057.59. Unless the risk of sentiment improves considerably or surprises American inflation to the upper part, the wider bias for gold prices Bullish remains. Traders will probably treat DIPs as buying options, especially prior to important inflation data later in the week.