Gold (XAUUSD) Market Update – May 22, 2025

Summary

• Current price: ~$3,336 per ounce
• Trend: Bullish momentum continues as gold breaks into a two-week high.
• Resistance Levels:
  • $3,310.48: Recently breached; serves as the immediate breakout level.
  • $3,435.06: Next technical resistance.
  • $3,500.20: All-time high and significant psychological barrier.
• Support Levels:
  • $3,277.91: First line of support on retracements.
  • $3,228.38: Secondary support zone.
  • $3,184.80 (50-day SMA): Strong technical base and potential trend reversal point.

A sustained move above $3,310 confirms bullish continuation toward $3,435 and possibly $3,500. However, a break below $3,228 could trigger a deeper correction.

Fundamental Factors Affecting Gold

• U.S. Fiscal Concerns:
• Moody's downgrade of the U.S. credit rating from Aaa to Aa1 has shaken investor confidence. With U.S. debt at $36 trillion and weak demand for long-term Treasuries pushing 30-year yields above 5%, gold is gaining as a safe-haven alternative.
• Geopolitical Tensions:
• Renewed U.S.-China trade friction and upcoming U.S.-Iran nuclear talks have injected fresh risk into global markets, driving safe-haven demand higher.
• Market Sentiment:
• JP Morgan projects $4,000 gold by Q2 2026, citing persistent macro uncertainty, inflationary risks, and robust institutional demand.

Key Takeaway for Traders

A perfect storm of fiscal instability, geopolitical risks, and technical strength fuels gold's current momentum. With the price above key resistance, bulls may soon target $3,435. However, failure to hold above $3,277 could open room for a pullback toward $3,185.

Watch for:

• U.S. inflation data
• Fed commentary on fiscal risks
• Escalation or resolution of geopolitical tensions (e.g., China, Iran)

XAUUSD – H4 Timeframe

The price action on the 4-hour timeframe chart of XAUUSD shows price nearing the rally-base-drop supply zone that initiated the bearish break of structure. A resistance trendline overlaps the supply zone, which is also nested within the critical levels of the Fibonacci retracement tool. Considering an inducement area just before the supply zone, there is sufficient argument for the bearish sentiment.

Analyst's Expectations: 

Direction: Bearish

Target- 3181

Invalidation- 3428.16

CONCLUSION

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