XAU to Head for $3,000 as Gold Buyers Show Resilience

Gold broke below the triangle formation early last week, but returned quickly after a rebound off the 20 daily SMA, showing that Gold traders are still aiming at new record highs. However, the triangle chart pattern for the Gold price is still playing out as the highs keep getting lower, so buyers seem to be waiting for another catalyst to get the next leg of the bullish rally going.

Gold (XAU) has experienced substantial gains in 2024 as central banks have started loosening monetary policies, weakening currencies and reducing yields—factors that traditionally benefit gold. Geopolitical tensions have also contributed to this rally. Although gold has set new records nearly every week, it has entered a corrective phase since hitting a fresh peak in late September. Last week, gold prices briefly pulled back but swiftly rebounded by over $50, reaching $2,655 after encountering the 20-day SMA at lows of $2,600.

Gold Daily Chart – Bouncing Off the 20 SMA Amid Global Tensions

Impact of U.S. Economic Data and Fed Rate Policy

Stronger U.S. employment data suggested a pause in the Fed’s rate-cutting cycle, with a 50 basis point cut now unlikely for November, as confirmed by Jerome Powell and some FOMC members. This development has boosted the USD, which contributed to the gold retreat. Despite this, gold remains more than $40 above last week’s lows, signaling underlying bullish momentum. Should the USD weaken and market sentiment turn risk-averse, gold could resume its uptrend, with the next target being $2,700, followed by the significant $3,000 level.

China’s Economic Stimulus and Geopolitical Factors

Markets are showing dissatisfaction with China’s stimulus efforts, as they fall short of expectations, potentially further fueling gold’s rally. While China’s commitment to increasing debt to stimulate its economy may curb some of gold’s gains, uncertainty remains. Rising geopolitical tensions in the Middle East provide additional support for the safe-haven asset.

Key Support and Resistance Levels for Gold

The $2,640 level serves as the base of a key triangle pattern, likely offering some support. A fall below this point could drive gold towards the $2,600–$2,610 range, where it would encounter last week’s low and the 20-day SMA. A decisive break below this level could trigger a significant downward move, with the next major support near $2,560. Bearish traders may see this as a signal for further declines in the XAU/USD pair. However buyers still remain in charge on the daily chart, so the upside targets come at $2,666 which was the high today and is where the upper line of the triangle comes at, followed by the all time high at $2,685 and then the round number at $2,700.

Gold Live Chart