Gold prices hit a six-week high, with Federal Reserve easing expectations acting as a catalyst

Technical signals indicate a strong trend, gold is expected to challenge $4300

From a chart perspective, gold prices have confirmed around $4250, which constitutes a key entry signal for bullish traders. The daily oscillation indicators show positive performance, creating conditions for further upward movement. The market expects gold to break through the intermediate resistance zone near $4277-4278, followed by a push towards the psychological level of $4300.

Meanwhile, the Asian session low around $4200 has formed a defensive line, protecting the short-term downside space. If gold weakens, the $4155-4153 area will become a support point for buyers. But if the price breaks below, technical selling may intensify, risking a decline towards $4100, and even approaching the convergence point at $4073—where the 200-period exponential moving average on the 4-hour chart and the upward trend line since late October coincide.

Loose monetary policy and safe-haven demand provide dual support

The shift in the Federal Reserve’s stance is becoming a major driver for gold’s rise. Recent dovish comments from Federal Reserve Board member Christopher Waller and New York Fed President John Williams further reinforce expectations of a rate cut this month. White House economic advisor Kevin Hassett stated on Sunday that if appointed by President Trump, he would support a significant rate cut, which immediately pushed gold prices to a six-week high during Monday’s Asian session.

Dovish expectations continue to pressure the dollar, with the US dollar index falling to a nearly two-week low, providing another support for precious metals. US economic data released last week showed mixed results, with limited impact on market expectations, but enough to sustain demand for non-yielding gold.

Geopolitical and economic risks boost risk aversion

Asian stock markets generally performed weakly, adding further support to safe-haven assets. China’s economic data remains weak, with a private manufacturing survey unexpectedly falling into contraction territory on Monday, and official PMI figures released on Sunday entering contraction for the eighth consecutive month, weighing on investor sentiment.

Geopolitical uncertainties persist. Ukraine’s navy drone attack on Russian “shadow fleet” oil tankers, and US Secretary of State Antony Blinken’s remarks after talks with Ukrainian officials that ending the war still requires more effort, continue to reinforce market demand for safe assets.

Short-term focus on US economic data

Despite rising gold prices, bullish traders remain hesitant, preferring to wait ahead of key US macroeconomic releases. Later today, the ISM Manufacturing PMI and other important economic indicators scheduled for this week will be critical variables influencing dollar demand and short-term gold trends. Traders are seeking the next momentum, and these data will undoubtedly be decisive.

Gold is currently at a critical juncture, with technical support and fundamental positives resonating, but the short-term direction depends on upcoming US economic performance.