GOLD - USD - Gold hits $2,800 but immediate continuation is questionable - 01/31/2025 (GMT)

Havens in general and gold in particular have been popular in 2025 so far as the new American tariffs loom. However, the main factor driving gold up still seems to be extremely strong overall sentiment. The Fed’s pause of rate cuts and generally good economic conditions in the USA make gold’s fundamentals somewhat shaky while recent nervousness in stock markets is a positive factor for the yellow metal.

Most of the time, when an instrument reaches a significant new area under conditions of strong sentiment, one would expect either continuation or consolidation; a retracement is less likely in this scenario. Consolidation seems to be favourable for gold now because it’s strongly overbought based on both the slow stochastic and Bollinger Bands while there hasn’t been a significant uptick in buying volume or ATR.

$2,720 is an obvious candidate for static support: this area was a resistance last quarter, tested twice unsuccessfully then. Equally, dynamic support might come from the 20. 50 and 100 SMAs. A significant retracement lower seems very unlikely for now, but traders should monitor political news from the USA and 7 February’s NFP.

This is my personal opinion which does not represent the opinion of Exness. This is not a recommendation to trade.