Gold Holds Above $3,000 as Geopolitical Tensions Fuel Record Rally

• Gold prices continue to attract the flow of safe shelters amid trading jitter and geopolitical risks.
• Wetten will continue to benefit the yellow metal as the Fed cut interest several times this year.
• A modest USD bounce and risk mood could limit the upward trend for Xau/USD couples.

Gold (XAU/USD) extends its upward momentum beyond the $3,000 psychological threshold, reaching a new record high during the Asian session on Tuesday. This marks its second consecutive day of gains and its fifth advance in the past six sessions, driven by concerns over U.S. recession risks, geopolitical tensions, and uncertainty surrounding former President Donald Trump’s policies. Additionally, expectations of further interest rate cuts by the Federal Reserve—reinforced by weaker consumer spending data on Monday—are adding support to the non-yielding precious metal.

On the other hand, positive sentiment in global markets, fueled by optimism over China’s economic stimulus and hopes for a Ukraine peace agreement, may limit aggressive buying in gold. A modest recovery in the U.S. dollar (USD), rebounding from its lowest level since October 2024, could also act as a headwind for XAU/USD. Investors are likely to remain cautious ahead of the Federal Open Market Committee’s (FOMC) two-day policy meeting, which is expected to influence USD demand and set the next directional move for gold.

Market Update: Gold Holds Strong Near Record High on Geopolitical Concerns

• The Israeli Defense Force (IDF) said it had launched a “massive strike” in the Gaza Strip, aiming for what it called Hamas’ “terrorist goals.” This took place after consultations to extend the Gaza ceasefire, not an agreement with the Qatar meeting.
• Concerns about the slowdown are resurfaced after US Finance Minister Scott Bescent failed to guarantee that the US economy will avoid a recession this year. This supports demand for traditional safe hull assets and raises gold prices to an all-time high during Tuesday’s Asian session.
• On the economic data front, the US Census Bureau reported on Monday that US Retail Sales rose by 0.2% in February vs the downwardly revised decline of 1.2% the prior month. The reading fell short of expectations for a 0.7% growth, signaling consumer caution and lifting bets that the Federal Reserve will resume its rate-cutting cycle.
• The Fed funds futures suggest that the US central bank could lower borrowing costs by 25 basis points each at the June, July, and October monetary policy meetings. This might cap the attempted US Dollar recovery from its lowest level since October 2024 touched on Monday and is further seen acting as a tailwind for the non-yielding yellow metal.
• In the meantime, US President Donald Trump expressed optimism that Russia and Ukraine could enter an armistice and ultimately enter a peace deal. This will be preceded by President Trump Putin’s peace talks on Tuesday. This continues to support an optimistic market mood, along with optimism listed by China’s incentive measures over the weekend.
• Traders are currently considering US economic dossets on Tuesday in building permits, apartment launches and publications of industrial production data. However, the focus will be on the results of the two-day FOMC meeting on Wednesday.

Gold Price Rally Pauses as Overbought RSI Warns of Potential Pullback

From a technical standpoint, maintaining a position above the key $3,000 psychological level could serve as a fresh catalyst for bullish traders. However, the daily Relative Strength Index (RSI) is beginning to indicate slightly overbought conditions. As a result, it may be wise to wait for some short-term consolidation or a minor pullback before considering further upside potential in the well-established uptrend observed over the past three months.

On the downside, any corrective decline below the immediate support at $2,980–2,978 could present a buying opportunity, with losses likely to be limited near the $2,956 resistance-turned-support level. A decisive break below this threshold, however, could trigger technical selling pressure, pushing gold prices toward the $2,930–2,928 region, followed by the key $2,900 mark and last week’s swing low near $2,880.