Gold prices are approaching $2,950, encouraged by softer US Consumer Price Index data, which suggested reduced recession fears. This shift led to a pullback in US bonds, drawing capital into equities and driving bond yields higher.
The likelihood of a 0.25% interest-rate cut by the Federal Reserve in June has increased with inflation rates slowing. Projections by BNP Paribas expect Gold to surpass $3,100 by Q2 2025, supported by rising economic uncertainties linked to tariff policies.
Key Resistance And Support Levels
Gold currently faces resistance at $2,947, with potential upward movement towards $2,961. Conversely, if prices dip below $2,927, S1 support lies at $2,913, and further support is positioned around $2,892.
What this means for traders is straightforward—expect movement, and plenty of it. The softer inflation data has tempered recession concerns, pushing investors towards equities. In doing so, bond yields have ticked up, which normally pressures Gold, yet here we are, knocking on the door of $2,950. The market response suggests risk appetite is increasing, but without undermining interest in Gold as a hedge.
The Federal Reserve’s potential rate cut in June adds another layer. With lower rates generally lifting non-yielding assets like Gold, traders should watch not just the Fed’s rhetoric but also any fresh inflation releases that could challenge current expectations. BNP Paribas has laid out an ambitious price target, banking on further economic instability driven by trade policies. If tariffs escalate, Gold’s appeal as a safe haven could strengthen further.
Trading Strategy Considerations
From a technical perspective, the important number for now is $2,947. A break above that could shift momentum upwards towards $2,961, but a slip under $2,927 puts $2,913 in focus, and beyond that, $2,892. Traders should plan accordingly, balancing short-term fluctuations against the broader picture of easing inflation and policy adjustments.
