Gold Daily | Gold Gains on Weaker Dollar and U.S. Fiscal Concerns, Testing Key Resistance Level

【Latest Gold Price and Recent Trends】

Gold prices rose 1.1% to $3,328, continuing their upward trend with a weekly gain of 4%, the largest since April 7. A weaker dollar and U.S. fiscal uncertainty boosted gold's safe-haven appeal.

【Technical Analysis】

Gold is in a clear downtrend channel since mid-April but showed signs of breaking through, currently testing the channel's upper boundary at around $3,340. If gold successfully closes above this level, it could indicate a reversal and continuation of the bullish trend. The market has seen strong buying interest, with a higher low and strong bullish candlestick patterns suggesting accumulation. Should the price stabilize above the resistance level, the next target may be $3,400, depending on macroeconomic developments.

【Market Sentiment and Economic Background】

Investor concerns over the U.S. fiscal deficit have increased gold's attractiveness, with a potential record weekly increase. The downgrade of the U.S. credit rating by Moody's further raised concerns about the fiscal outlook. The U.S. House has passed a tax and spending bill which could increase national debt by $3 trillion to $5 trillion, weakening the dollar and boosting gold prices. Amidst geopolitical tensions and economic uncertainty, gold remains a favored safe-haven asset. Speculation that the Federal Reserve might cut rates in 2025 adds to the dollar's weakness and enhances gold's appeal.

【Opinions】

Analysts suggest that gold may continue to hold above $3,000 as long as issues like tariffs, U.S. debt, and geopolitical tensions persist. The basic fundamentals remain strong with the downgrade of the U.S. credit rating being a key factor pushing investors towards gold. Valeria Bednarik suggests that while gold lost some upward momentum, its downside is limited, sustained by global bond market volatility. Justin Lin from Global X ETFs points out that while gold might fluctuate, ongoing geopolitical tensions and U.S. fiscal concerns provide underlying support for gold prices.