Gold price holds near record highs despite Dollar strength and Fed’s cautious outlook

Gold (XAUUSD) continues to show impressive strength, holding near record highs despite a sharp rebound in the US Dollar. The recent recovery in the Dollar follows a cautious Federal Reserve stance and stronger-than-expected economic data. However, gold remains in demand, supported by firm technical structure and strong investor interest. Markets now turn their attention to key inflation data, Fed commentary, and global developments for further direction. Taken together, these factors help maintain gold’s strong position in its ongoing uptrend.

Gold maintains uptrend after Fed’s cautious cut and robust US data

Gold continues to trade near record highs, reflecting strong momentum despite recent Dollar strength. The sustained rally shows that gold remains in demand, even as the Dollar regains ground. Meanwhile, the Federal Reserve struck a cautious tone, pairing its rate cut with a measured outlook. In addition, updated projections included two more rate cuts by year-end. However, Powell’s remarks framed the move as precautionary, which reduced expectations for rapid easing.

In parallel, recent economic indicators from the U.S. showed unexpected strength. Jobless claims fell, and manufacturing figures showed strength. As a result, these developments helped the Dollar rebound sharply. In addition, the Dollar’s rebound was supported by the closing of short positions, as the recent decline appeared overextended. Despite this backdrop, gold prices held near record levels. Furthermore, the sustained strength indicates solid buying interest, supported by concerns about inflation risks and geopolitical tensions.

Looking ahead, markets will focus on the core PCE Price Index, as it remains the key inflation indicator for the Fed. In particular, this report may help determine the market’s outlook on the path of future rate cuts. Fed speeches throughout the week will also be closely monitored for policy clues. At the same time, Treasury auctions could impact yields and indirectly affect gold prices. Furthermore, geopolitical uncertainty, especially around US-India trade relations, remains a potential driver for gold.

Gold price breaks triangle resistance, enters bullish flag pattern

The gold chart below shows a breakout from a symmetrical triangle that formed after months of compressed price action. Throughout this phase, buyers stepped in at higher lows, forming a steadily rising support line. Meanwhile, sellers capped advances at lower highs, establishing dynamic resistance along the upper boundary of the triangle.

Consequently, gold’s breakout from the triangle triggered a sharp surge in momentum. The move confirmed that the market had been positioned for a breakout. It was likely driven by evolving macroeconomic trends and renewed demand for hard assets. Moreover, the sharp acceleration in price action suggests heavy buying from institutions or strategic shifts by major market participants.

Currently, gold has transitioned into a bullish flag formation, marked by two red dashed lines on the chart. It represents a bullish consolidation phase rather than a reversal signal. Price action remains stable, marked by shallow pullbacks and lower volume, both of which are common during consolidation. Gold continues to trade well above the breakout level, reinforcing the strength of the move. Although momentum indicators are elevated, they remain below extreme levels, leaving room for additional upside.

Gold outlook: Bullish structure intact despite Dollar strength

Overall, gold remains firmly positioned for further gains. Despite a strong recovery in the U.S. Dollar, the metal continues to hold near record highs, supported by solid technical structure and persistent buying interest. In particular, the breakout from the symmetrical triangle and the current bullish flag formation both signal trend continuation. With inflation data, Fed commentary, and geopolitical risks in focus, gold appears well-supported for a potential move higher in the weeks ahead.

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