Gold prices rose to an incredible high on Tuesday, pushing up over the vital $2,900 level to test levels at around $2,910 on the back of a weakening US Dollar. A new injection into the Euro in response to the news of an imminent German defense spending agreement unleashed a domino effect, sliding the US Dollar Index and enhancing demand for the safe-haven metal. Simultaneously, global market mood is still susceptible to the escalating tariff tensions between Canada and China. With investors looking to the next Federal Reserve meeting on March 19 and the CME FedWatch Tool indicating a high chance of unchanged rates, Gold remains supported, both technically and fundamentally, as it wipes out early-week losses and gains bullish traction.

KEY LOOKOUTS

• Gold is trading above $2,910; a break above R1 may drive prices towards $2,933, in line with last week’s highs.

• A softer US Dollar, prompted by Euro strength, continues to underpin Gold’s rally, maintaining bullish momentum in the short term.

• Markets expect no rate change on March 19, but increasing rate-cut expectations for May may further shape Gold’s price action.

• Persistent global tariff tensions and recession concerns add to Gold’s safe-haven allure, keeping investors wary yet hopeful of further gains.

Gold are still closely correlated with wider macroeconomic and geopolitical events. The recent breakout over $2,910 emphasizes its potential for higher prices, with sights set on the next level of resistance at $2,933, coinciding with last week’s highs. A declining US Dollar, driven by a strengthening Euro off the back of Germany’s defense spending news, continues to drive bullish momentum in Gold. Further, investors are following the Federal Reserve’s policy meeting on March 19, at which no rate adjustment is anticipated, but the chances of a rate reduction in May are increasing. On the other hand, global trade tensions and fears of recession are boosting Gold as a safe-haven asset.

Gold’s increase over $2,910 indicates strong bullish sentiment, with support coming from a depreciating US Dollar and geopolitics. Traders now focus on the March 19 Federal Reserve meeting, while global trade tensions further augment Gold’s safe-haven demand.

• Gold prices recover strongly, rising above the $2,910 level and wiping out early-week losses.

• Weaker US Dollar propels Gold, fueled by Euro strength following Germany’s defense spending deal headlines.

• Technical breakout opportunity arises as Gold approaches resistance at $2,933, last week’s high.

• Safe-haven demand increases as global trade tensions escalate and concerns of a possible economic slowdown grow.

• CME FedWatch Tool indicates a 95% probability of no rate hike on March 19, but a 47.8% probability of a cut in May.

• Support zone remains firm at $2,880–$2,873, keeping Gold technically supported for the time being.

• Thai Baht gains from Gold rally, reflecting Thailand’s status as a regional Gold-trading hub amid currency market shifts.

Gold remains in the limelight as economic and political changes around the world shape market sentiment. One major driver of Gold’s popularity is the weakening US Dollar, which was under pressure after reports of a possible defense budget agreement in Germany. This move supported the Euro and, in turn, pushed demand for the precious metal higher indirectly. With increasing uncertainties, Gold remains a trusted safe-haven asset, providing investors with a buffer against volatility in conventional markets.

XAU/USD Daily Price Chart

Chart Source: TradingView

Meanwhile, geopolitical tensions are also a dominant theme influencing market sentiment. The growing trade tensions between Canada and China, as well as the fear of wider tariff wars, is spurring caution in global markets. Investors are also monitoring the upcoming Federal Reserve meeting closely, as interest rate announcements can have implications for the overall economic direction. In such a setting, Gold remains steadfast as a safe haven of value, drawing in those looking for stability in the midst of the tempest.

TECHNICAL ANALYSIS

Gold has regained bullish momentum after taking back the crucial $2,900 level and moving towards $2,910. The metal has also crossed above the daily Pivot Point at $2,895, indicating strength in intraday trading. If purchasing interest remains, the following resistance level to be aware of is around $2,933, which matches last week’s highs. In contrast, support is seen to be strong at $2,880, which has remained in place in recent sessions. If it breaks here, it can potentially open doors towards further support around $2,873 and $2,857, presenting important zones to be watched out for by traders in the short term.

FORECAST

Gold may continue to rise in the following sessions. Its clear break above the $2,910 level may set the stage towards the next significant resistance near $2,933, which is also last week’s high. Breaking through this zone might reinforce buying confidence and drive Gold towards fresh short-term highs, provided the US Dollar continues to weaken and global tensions persist. Also, increasing hopes of a potential rate cut in the near future could further help Gold’s bullish outlook.

Gold could see selling pressure. A fall below the support of $2,880 would lead to a move towards $2,873, and then a more significant correction towards about $2,857. These are crucial checkpoints for the traders, as a break below these levels could indicate a change in short-term momentum. Further, if the geopolitical tensions are alleviated or the Federal Reserve adopts a more hawkish approach in the next meeting, it might cap Gold’s upside and raise downside risks.