GOLD Analysis
Gold Eyes Upside on Soft Dollar and Growth Woes Amid Trade Diplomacy Progress
Highlights
- Gold supported by global growth downgrades and expected US rate cuts amid easing trade tensions.
- CMP $3,360 offers a bullish opportunity up to $3,388, while a break below $3,335 invalidates the setup.
- US CPI data will be critical in shaping Fed policy expectations and gold’s next directional move.
Overview:
Gold prices are hovering just below $3,335 and are showing signs of upward momentum, trading at $3,360 at the time of writing. The movement reflects a shift in investor sentiment as markets weigh global economic challenges against easing geopolitical tensions. A buy-on-dip strategy seems appropriate under current conditions, especially as global risk appetite remains fragile and central banks face renewed policy uncertainty.
US-China trade tensions have softened following productive high-level discussions in London. A preliminary agreement to implement prior Geneva accords could pave the way for easing disputes over rare earth exports, a sector critical to global tech and defense industries. While final decisions await confirmation by Presidents Trump and Xi, market sentiment has improved. However, investors remain cautious due to the World Bank’s downward revision of the 2025 global growth forecast to 2.3%, citing the disruptive impact of rising tariffs and prolonged uncertainty.
Additionally, all eyes are now on this week’s US inflation data—Core CPI m/m, CPI m/m, and CPI y/y—which could significantly impact the Federal Reserve’s policy direction. Softer-than-expected readings may reinforce rate cut bets for later this year, potentially offering gold a strong tailwind.
Technically, gold has shown resilience, having rebounded from key support levels. With the CMP at $3,360, a buy is recommended up to $3,388, with the view that bullish momentum will persist as long as prices remain above $3,335. A break below $3,335 would invalidate the near-term bullish bias, triggering profit-booking or reassessment of long positions.