Gold price analysis: Bullish trend holds as US Dollar weakens

Gold prices have been on an upward trend in recent months. Investors continue to seek safe-haven assets amid economic uncertainty. The latest developments in the US economy have influenced the price movements of gold. Market participants closely monitor interest rates and economic indicators to assess future price action.

Gold price and market movers

Gold prices experienced a pullback but maintained solid gains for the week. Traders took profits as the price fell below $2,900. Despite the decline, the metal remained resilient due to weakening US Treasury yields and a softening US dollar. XAU/USD was last seen trading at $2,883, marking a daily loss of 1.48%.

US retail sales data released earlier showed a sharp decline, putting pressure on the greenback. This provided some support for gold as investors adjusted their positions. Industrial production in the US showed improvement, which partially offset the negative sentiment from retail data.

Federal Reserve rate cut expectations further impacted the market. Investors priced in multiple rate cuts in 2025. This led to a decline in the US 10-year Treasury yield, which dropped to 4.472%. Lower yields tend to support gold prices by reducing the opportunity cost of holding the metal.

Additional factors influencing gold prices include central bank purchases. The World Gold Council reported that central banks bought over 1,000 tons of gold in 2024. Demand increased significantly following Trump’s electoral victory. This trend suggests continued strong demand for gold as a reserve asset.

Gold price technical outlook

The chart below shows an ascending channel in the gold market, indicating a strong bullish trend. The price consistently respects the channel's support and resistance levels. Buyers dominate as the price forms higher highs and higher lows. The midline of the channel also acts as dynamic support and resistance. The trend remains intact unless the price breaks below the lower boundary.

Recently, gold tested the upper resistance and faced selling pressure. A pullback brought the price near the midline, where buyers attempted to regain control. The support held, suggesting a continuation of the trend. If the price breaks above the recent highs, gold may push toward new resistance levels. However, a breakdown below the channel could signal a trend reversal.

Conclusion

Gold remains in a strong uptrend despite short-term pullbacks. Economic uncertainty, falling US Treasury yields, and central bank demand continue to support prices. Technical analysis shows an intact bullish structure, with key support levels holding. If gold breaks above $2,942, further gains are likely. However, a break below the ascending channel could signal a shift in momentum. Traders should watch economic data and Fed policy for future price direction.

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