Will Gold Extend Its 7-Week Rally Beyond $3,891?
Gold prices tick higher on track for solid weekly gains.
FUNDAMENTAL OVERVIEW:
Gold prices inched higher on Friday, supported by safe-haven demand, even as risk assets continued to rally. Optimism surrounding artificial intelligence and expectations of further U.S. interest rate cuts kept equity markets buoyant, with Wall Street indexes hitting fresh record highs. While gold gained, its upside was capped as investors’ appetite for risk limited safe-haven flows.
The broader demand for gold and other traditional havens was tempered by steady strength in global equities, as markets largely shrugged off concerns about a potential U.S. government shutdown, citing its historically minimal impact on financial markets.
Expectations of lower U.S. interest rates also encouraged risk-taking, particularly after multiple private labor market reports signaled ongoing weakness. With September’s government nonfarm payrolls data delayed due to the shutdown, investors placed greater weight on private employment figures.
Despite these mixed factors, gold was poised to end the week up 2.2%, marking its seventh straight weekly advance. The metal has been bolstered by growing conviction that the Federal Reserve will proceed with additional rate cuts before year-end.
GOLD TECHNICAL ANALYSIS CHART:
Technical Overview:
Gold is trading within an up channel.
Gold is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Bullish Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 3891.00
Immediate support level: 3795.36
HOW TO TRADE GOLD
After a steady upward move, gold saw a minor dip but quickly rebounded and is now hovering near its previous resistance, facing rejection on the upside. Following this rejection, prices may pull back toward the immediate support zone. If this level holds, gold could regain momentum and resume its upward trajectory.