Gold’s Short-Term Squeeze Pattern Nears Historic High Amid Global Uncertainty

Market Overview

Gold remains well-supported as global uncertainties persist, including sustained central bank purchases, ongoing geopolitical tensions, and expectations of further interest rate cuts by the U.S. Federal Reserve. This macroeconomic backdrop continues to act as a robust foundation for gold prices, helping them hold above the $2600 mark. As concerns around global stability grow, safe-haven demand for gold has remained strong, reinforcing its position near historical highs.

Technical Analysis

On the hourly chart, gold has formed a short-term squeeze pattern in the Bollinger Bands, signaling that a breakout may be imminent. After stalling near its historic high, the price is hovering above the upward trendline and above its moving averages, indicating continued bullish pressure. Should buyers gain the momentum needed to break the immediate resistance at 2670.46, the squeeze breakout could see prices targeting 2676.10, 2683.28, and 2691.21. Further bullish momentum might even push gold towards 2699.80, which represents the next major resistance.

However, the RSI (Relative Strength Index) is in the overbought zone, suggesting that a temporary pause or correction may occur before the upward trend resumes.

Alternative Scenario

If buyers fail to maintain upward momentum and the price retreats, the first key support level stands at 2649.71. A break below this level could signal a short-term bearish shift, pulling prices lower and invalidating the bullish outlook in the near term.

Key Levels Overview

• Resistance Levels:
  • Resistance 1: 2670.46
  • Resistance 2: 2683.28
  • Resistance 3: 2691.21
  • Resistance 4: 2699.80
• Current Price: 2661.02
• Support Levels:
  • Support 1: 2660.09
  • Support 2: 2649.71

Key Events to Watch

While the dominant driver for gold remains expectations of further interest rate cuts from the Federal Reserve, today’s U.S. economic data will be crucial. Investors are closely watching the release of weekly jobless claims, quarterly GDP growth, and factory orders for clearer signals regarding the Fed’s future monetary policy. Additionally, remarks from Fed Chair Jerome Powell and other policymakers later today will provide further insights into the potential for deeper rate cuts, which could impact gold’s trajectory.

Conclusion

Gold is currently at a pivotal point, trading near its historic highs with a potential breakout looming. The technical setup favors the bulls, but overbought conditions may lead to a temporary pause. The next move will largely depend on today’s U.S. economic data and Fed commentary, which could shape the direction of gold prices in the short term.

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