In recent trading sessions, gold prices (XAU/USD) have shown significant activity, with the near-term swing chart indicating a target of $3879.64. However, traders are cautious, noting that a strong catalyst might be required to push the market upward at such a fast pace. On the downside, minor pivot support is set at $3660.20, with a critical new bottom established at $3627.96. Should the price drop below this level, it would indicate a bearish trend in the short term.
Additionally, there are several support levels in place that traders are keeping an eye on, including $3612.83, $3609.65, and more critically, deeper levels at $3511.75 to $3500.20. The 50-day moving average, currently at $3436.02, continues to serve as the major indicator for the overall trend of gold prices.
In the global market, physical demand has been sending strong signals, particularly in India, where gold premiums have climbed to a 10-month high amid festival buying, despite the record prices. This reflects strong investor conviction in the market. Conversely, Chinese buyers are experiencing wider discounts, with spreads reaching a five-year peak. This divergence in regional demand highlights the overall strength of gold demand, even as prices hover near their all-time highs.
Looking forward, analysts predict that gold prices will remain underpinned by factors such as easing measures from the Federal Reserve, robust physical demand, and strategic investor positioning. While there is potential for profit-taking that could see prices dip toward the $3600 mark, the overall trend remains bullish. Several analysts suggest that if rate cuts accelerate and inflation risks continue to linger, a price target of $4000 is reasonable. Traders are advised to monitor the support at $3627.96 closely, as any breach below this level could shift the current market momentum toward the downside.
