Technical Analysis: Gold’s Trend, Support, and Resistance Levels
1. Uptrend Remains Intact, Higher Lows Hold Strong
Looking at the daily chart, gold has been in a clear uptrend since mid-December 2024, forming higher highs and higher lows along a well-respected ascending trendline (marked in purple).
Trendline Support: The trendline has been tested multiple times and remains intact. Unless we see a break below it, gold’s momentum remains bullish.
Key Higher Low: The last major higher low was formed near $2,955, making this a critical pivot point for bulls to defend.
2. Resistance Zones and Next Upside Targets
Now that gold has broken above $3,000, where does it go next?
Immediate Resistance: $3,050 – This level aligns with a psychological resistance zone and previous projections for upside targets.
Extended Target: $3,100 – If momentum remains strong, gold could push toward this level, where we might see more aggressive selling.
3. Support Zones to Watch for a Pullback
Breakouts are great, but they often retrace before continuing higher. Here’s where we should be watching:
First Support: $2,980 – If price pulls back, this is the first level where buyers might step in.
Stronger Support: $2,955 – This aligns with previous resistance-turned-support and the ascending trendline, making it a key area for bulls to hold.
Major Support: $2,790 – If gold drops below $2,955, this is the next big level where institutional buyers could step in.
4. RSI Overbought Conditions – Warning for Bulls?
The Relative Strength Index (RSI) is currently at 71.27, which signals that gold is in overbought territory.
What this means: Overbought conditions don’t always mean an immediate drop, but they do suggest that we might see a short-term pullback or consolidation before gold makes its next major move.
Fundamental Drivers Behind Gold’s Surge
While technical levels provide trade setups, the big picture fundamentals explain why gold has been rallying.
Here are the key factors pushing gold higher:
1. Geopolitical Risks Driving Safe-Haven Demand
Gold thrives in uncertainty, and recent geopolitical tensions have triggered strong inflows into safe-haven assets.
Middle East Conflict – Ongoing Israel-Hamas tensions and recent U.S.-Iran developments have increased market fears.
Trade War Tensions – The U.S. has reaffirmed reciprocal tariffs on Chinese goods (set to take effect April 2).
Source: Reuters
2. The Federal Reserve’s Monetary Policy – The Next Big Catalyst
Gold’s next major move depends on what the Fed does next.
Rate Cuts? If the Fed signals a rate cut, the USD weakens, and gold sees further upside.
Hawkish Fed? If the Fed pushes back on rate cuts, gold could face profit-taking and a potential reversal.
The upcoming Fed statement on Wednesday will be a major event to watch.
Source: Bloomberg
Possible Scenarios: Where Gold Goes Next
Based on both technical and fundamental factors, we see three possible scenarios playing out:
Scenario 1: The Breakout Holds, Gold Pushes Higher
Gold stays above $3,000, consolidates, and continues the rally.
Price targets: $3,050 first, then $3,100 if momentum remains strong.
This happens if: The Fed signals rate cuts & risk-off sentiment remains high.
Scenario 2: Short-Term Pullback Before Another Leg Higher
Gold retraces toward $2,980 or $2,955 before resuming its uptrend.
Price holds above the ascending trendline, confirming trend strength.
This happens if: The Fed remains neutral, but buying pressure stays strong.
Scenario 3: Fakeout & Reversal, Bears Step In
Gold drops below $2,955, invalidating the breakout.
The price targets would shift to $2,900 or even $2,790 if selling accelerates.
This happens if: The Fed remains hawkish, the USD strengthens, and traders take profits.
Trading Strategy: How to Approach Gold Right Now
If you’re looking to trade this move, here’s how to position smartly:
1. Don’t Chase the Highs
Breakouts often pull back before moving higher. Wait for support levels ($2,980 or $2,955) before entering long positions.
2. Watch the Federal Reserve Statement
A dovish Fed = more upside for gold.
A hawkish Fed = potential correction.
If the Fed is neutral, gold could consolidate before making its next move.
3. Monitor Price Action Around Key Levels
Bullish Setup: Buy dips into $2,955 or $2,980 with stops below $2,900.
Bearish Setup: If gold breaks below $2,955, look for shorts targeting $2,900.
Gold’s Next Big Move Depends on These Factors
Gold has officially broken out to new all-time highs, but the next move depends on:
• The Fed’s rate policy statement this week
• Whether gold holds above key supports ($2,955-$3,000)
• How geopolitical risks continue unfolding
For traders, patience and smart positioning will be key.
Key Takeaways
• Gold broke its all-time high, but the next move depends on whether momentum holds above $3,000.
• The RSI is overbought, so a pullback to $2,955 or $2,980 is likely before another leg higher.
• The Fed’s rate decision is the next major catalyst—watch for signals on rate cuts or hawkish policy.
• Traders should avoid chasing highs and instead focus on buying dips or waiting for confirmation of a continuation.