Market review
Spot gold rose steadily during the Asia-Europe session, reaching a high of $3,720.05/oz and, at the time of writing, trading at $3,696.85/oz, up 0.34% from the previous day, showing strong bullish momentum.
Technical analysis
On the 1-hour chart, short-term moving averages are in a bullish alignment and the 50-period EMA (EMA50) provides effective support. Price has repeatedly pulled back to the EMA50 and then rallied, indicating bulls are in control in the short term and the uptrend is relatively stable. The Bollinger Bands are widening, signaling increased volatility; price is near the upper band, which confirms bullish strength but also raises the risk of a technical pullback if price moves too far above the band.
Drivers
Fed governor Milan said in a speech in New York that he will analyze economic data independently and supports larger rate cuts. His dovish comments weighed on the US dollar and provided further support for gold. Rising market expectations of additional Fed cuts continue to drive money into gold, and record prices are attracting trend-following flows.
Trading strategy (reference)
Spot gold
- Buy on a pullback to 3700.00 if it holds.
- Target: 3730.00.
Spot silver
- Buy on a pullback to 43.000 if it holds.
- Target: 43.400.
Risk warning: Trading markets carry unpredictable risks, including the loss of principal. This analysis is for reference only and does not constitute investment advice. Investors should make independent decisions based on their own risk tolerance.