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This phenomenon strengthens the dollar, which recently tested resistance at 108, with a potential breakout targeting 110. However, recent tariff concerns have added volatility to the US dollar.
On the other hand, gold is retracing toward support levels, but the overall trend remains bullish. Rising inflation expectations and foreign central bank gold purchases will likely sustain demand. The physical gold market remains tight, reinforcing the metal’s long-term uptrend. This week’s release of CPI and PPI data will provide further direction on U.S. inflation and impact interest rate decisions.
Gold (XAU) Technical Analysis
Gold Daily Chart – Bullish Momentum
The daily chart for gold shows that the price trades within an ascending broadening wedge pattern and continues to move higher. The price correction from the record level on Friday suggests further consolidation before continuing the upward move.
The breakout from $2,795 indicates that gold will likely continue toward the $3,000 price zone. However, the RSI has reached its highest level since September 26, 2024, signaling a possible price correction before the next move. Strong support remains at the $2,795 zone. This price correction from record levels might be a good strategy to execute a trade in gold.
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