Gold prices have been fluctuating near the all-time high, just below the $3,000 level achieved last Friday. The market sentiment remains positive for gold, driven by concerns over growing trade tensions and geopolitical risks, which support its status as a safe haven.
Traders are anticipating multiple interest rate cuts by the Federal Reserve this year, amid signs of a cooling economy and lower inflation rates. This expectation complements the elevated demand for gold, although positive news from China regarding economic stimulus limits significant gains in the gold market.
Geopolitical And Market Influences
Recent comments from US Treasury Secretary Scott Bessent indicate a lack of concern over market corrections, while fears stemming from US trade tariffs continue to favour gold. Geopolitical tensions have also escalated, with threats involving US military actions contributing to the gold price’s support.
The Federal Reserve’s potential decision to lower borrowing costs could occur as planned for June, July, and October. Softer consumer sentiment reported last week further strengthens this outlook, leaving the US dollar under pressure.
China has announced measures to stimulate economic activity, enhancing consumer confidence but restricting gold’s upward movement. Following upcoming US economic data releases, anticipation is building for the Federal Reserve’s decisions that will affect both the dollar and gold prices.
Technically, gold has broken key resistances, indicating a potential upward momentum, though overbought conditions may lead to a consolidation period. Fresh buying may occur around $2,956, with significant support near $2,930-2,928, while a drop below this level could trigger further declines towards $2,900.
Currency Market Movements
Recent data shows the US dollar has fluctuated against various currencies; it was strongest against the Canadian dollar, with notable percentage changes across other major currencies.
Gold has been hovering near record levels, with prices just under the $3,000 mark last reached on Friday. Sentiment in the market has remained strong, backed by rising anxiety over trade disputes and global tensions that reinforce gold’s appeal as a safe asset. Traders appear to be positioning for multiple interest rate reductions this year, largely in response to a cooling US economy and weaker inflation figures. These expectations continue to support demand, though policies in China aimed at boosting economic growth have introduced resistance to further gains.
Bessent’s latest remarks suggest that officials in Washington are not particularly concerned about any downturns in asset prices. At the same time, persistent uncertainty regarding new US trade tariffs has made gold more attractive. On the geopolitical front, tensions remain elevated, particularly with threats of military engagement further underpinning demand for the metal.
Decisions from the Federal Reserve could see interest rates cut in June, July, and October, should economic conditions support such moves. Last week’s softer consumer sentiment data has only reinforced this view, intensifying pressure on the US dollar in the process. This weaker dollar, in turn, has provided a favourable environment for gold prices to stay at elevated levels.
Meanwhile, Beijing’s latest efforts to stimulate domestic demand have lifted confidence across Asian markets, limiting gold’s ability to rally further. With new economic reports from the US set to be released in the coming days, traders will be watching closely for any changes that may influence monetary policy decisions, directly impacting both the dollar and gold prices alike.
From a technical perspective, gold has breached key resistance zones, paving the way for an extension of the existing upward trend. That said, overbought conditions suggest that prices could stabilise before any further rises. Fresh buying interest is likely to emerge around $2,956, with notable support placed in the $2,930–$2,928 range. Any decline beyond this threshold may see a drop towards $2,900.
The US dollar has been moving against a basket of major currencies, showing the greatest strength against the Canadian dollar. Elsewhere, changes in valuation have varied, with notable swings recorded across other major currency pairs.
