Gold Price Outlook: XAU/USD Holds Firm Amid Easing US Inflation and Global Geopolitical Turmoil

Gold prices remain resilient within a narrow trading band, supported by soft inflation data and escalating global tensions, while the US Dollar weakens under persistent bearish pressure.

🟡 Key Highlights

Gold trades in a tight range between $3,250 and $3,350, forming a descending channel pattern.
Easing US inflation revives expectations of Fed rate cuts, offering tailwinds to gold.
Rising global geopolitical tensions — from China-US trade rifts to Ukraine conflict — bolster safe-haven demand.
Technical charts suggest a potential breakout above $3,360 could ignite a move toward $3,500.

📉 Gold Finds Support as US Inflation Slows and Risk Sentiment Weakens

Gold (XAU/USD) rebounded near $3,271 and is consolidating around $3,310 in early Monday trading, following the release of the US PCE inflation report, which showed a cooling to 2.1% year-over-year in April, down from 2.3% in March. The softer print has strengthened the case for a potential Federal Reserve rate cut — a typically bullish factor for precious metals.

Meanwhile, geopolitical uncertainty continues to drive demand for gold:

Trump’s renewed criticism of China over unmet trade commitments raises market anxiety.
Talks between the US and China on critical minerals are expected, yet uncertainty looms.
Ukraine’s large-scale drone attack on Russian military assets adds fresh risk to the global outlook.

Despite strong overhead resistance near $3,360, a combination of easing inflation and rising tensions sustains bullish sentiment in the gold market.

📊 XAU/USD Technical Analysis – Key Levels in Focus

Daily Chart Overview:

Gold remains confined within a descending channel, with the upper boundary at $3,360 acting as immediate resistance.
A breakout above this zone could set the stage for a rally toward $3,500.
Price is trading above both the 50-day and 200-day SMAs, supporting the bullish structure.

4-Hour Chart Insights:

Gold recently rebounded from $3,245, the lower channel support and neckline of an inverted head and shoulders pattern.
A move above $3,400 would reinforce upside momentum, potentially targeting $3,500 and beyond.
Caution is warranted below $3,245, which could open doors to a deeper retracement.

💹 US Treasury Yield & DXY Analysis – What to Watch

10-Year Treasury Yield:

Yields are facing strong resistance at 4.60%, failing to break higher despite multiple attempts in 2025.
Technical patterns suggest a bullish setup, but sustained breakout above 4.70% is needed to confirm upside.
Short-term range: 4.10% – 4.80%, with support near 4.00%.

US Dollar Index (DXY):

The DXY remains under pressure, trading below its 50-day SMA and failing at key resistance near 100.65.
A broader descending channel remains intact on the 4-hour chart, signaling further downside toward 97 and possibly 90.
Technical rejection at 102 confirms bearish sentiment, with RSI and MACD indicators aligning with a downward trend.

🔎 Conclusion: Gold’s Path Hinges on Global Events and US Data

Gold prices are in a technical consolidation phase but maintain upward bias amid global instability and softer US economic indicators. All eyes now turn to the upcoming US Nonfarm Payrolls report this Friday, which could offer further clues on the Federal Reserve’s next move.

Bullish Scenario: Break above $3,360 targets $3,500 and potentially $3,750.
Bearish Risk: Drop below $3,245 may trigger correction toward $3,150 or $3,000.

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