Gold continues to demonstrate impressive resilience as it trades near record highs, even amid renewed strength in the U.S. dollar and buoyant equity markets. Over the past 10 days, the dollar has staged a notable recovery, yet gold has managed to hold firm—displaying neither a strong downside trend nor a decisive seller’s market. This decoupling from traditional pressures highlights gold’s evolving role in a highly uncertain macro environment.
Ordinarily, a stronger dollar exerts downward pressure on gold prices, given that bullion is priced in USD. And indeed, we have seen gold lose some upside traction in recent sessions. However, what stands out is the lack of aggressive selling. Despite the dollar’s momentum, gold has continued to form higher lows, maintaining a structurally bullish posture. This suggests that demand remains firm beneath the surface, even in less-than-ideal macro conditions.
As the greenback now shows signs of stalling, gold is tentatively edging higher supported by modest U.S. dollar weakness. This pattern reinforces the idea that gold is being accumulated on dips, not abandoned during pullbacks.
Technical Outlook
From a charting standpoint, gold appears to be coiling within a symmetrical triangle pattern—a classic technical setup that often precedes a breakout. As momentum narrows toward the apex, volatility compresses, setting the stage for a sharp directional move. While it’s impossible to predict the direction of the breakout with certainty, the underlying trend remains to the upside, giving the benefit of the doubt to the bulls for now.
A sustained break to the upside could reignite momentum, especially if gold pushes beyond key resistance levels. Conversely, a move below $2,300–$2,320 (or more technically, a confirmed breakdown through $3,200 if referencing other currency pairings or indices) would raise questions about near-term strength.
Gold (XAU/USD) daily chart
Past performance is not a reliable indicator of future results.
Macro Fundamentals Still Favor Gold
Beyond technical, the fundamental picture continues to support gold. Inflation remains stubborn in parts of the global economy, and rate cut expectations, while delayed, have not been taken off the table entirely. Real yields remain relatively low, which continues to bolster gold’s appeal as a non-yielding asset.
Moreover, with equities at record highs, many investors are seeking portfolio diversification and hedges against potential market volatility. Gold—along with assets like the Japanese yen—has reasserted its value as a risk hedge, particularly when macro uncertainty is high.
Therefore, despite headwinds from a firm dollar and strong equity markets, gold continues to look technically and fundamentally constructive. There has been no clear selling pressure, and if current support levels hold, the metal could be gearing up for another leg higher.
While short-term direction may hinge on upcoming U.S. economic data and Federal Reserve signals, gold’s ability to hold its ground speaks volumes. For now, the broader message is clear: gold remains a favoured asset in a world still brimming with uncertainty.
By Daniela Sabin Hathorn, senior market analyst at Capital.com
