As gold continues its upward trajectory, the metal appears poised for a potential rally toward new all-time highs.
Notably, a closer look at the weekly gold chart reveals a series of bullish consolidations followed by breakouts, according to analysis shared by Gold Predictors on January 20.
Currently trading at $2,718, gold has maintained its position near the upper end of a critical resistance zone, setting the stage for a potentially ‘sharp move higher.’
Picks for you
Technical analysis points to continued strength
Gold’s current price action reflects a well-established bullish trend, with the metal forming higher lows and breaking out of key consolidation phases over the past year.
Each consolidation has provided a base for subsequent surges, reinforcing the upward momentum. This historical behavior underpins the current price action, where gold is consolidating just below significant resistance levels at $2,720 and $2,790.
“GOLD forms a series of bullish price consolidations ahead of the next surge.
Similar behaviour in the gold market and a strong start to 2025 fuels volatility.
A break above $2,720 and $2,790 could spark another sharp move higher.” – the analyst noted
A move above $2,720 could attract significant buying interest, pushing gold toward the next resistance at $2,790.
On the flip side, a failure to hold these levels may trigger a pullback to around $2,600, although the broader uptrend remains firmly intact.
Key levels to watch
Adding to the technical analysis, RLinda highlights crucial levels for XAU/USD. Resistance is noted at $2,721, $2,726, and $2,761, while support is identified at $2,703, $2,697, and $2,690.
Furthermore, the 0.5 Fibonacci level at $2,717 and the 0.7 to 0.79 Fibonacci range between $2,711 and $2,708 are seen as important liquidity zones, that could halt corrections and re-establish the uptrend.
A retest of the local high between $2,726 and $2,732 could confirm the metal’s readiness for another rally, signaling continued bullish momentum as gold eyes further gains.
This aligns with predictions by ChatGPT-4o, which forecasts that gold prices will hover between $2,700 and $2,750 in Q1 2025, further supporting the optimistic outlook for the precious metal.
Outlook for Gold
Geopolitical risks and market uncertainties continue to drive gold’s appeal as a safe-haven asset.
U.S. President Donald Trump’s plan to impose 25% tariffs on Canada and Mexico has reignited fears of a global trade war, driving demand for the precious metal.
At the same time, expectations of Federal Reserve rate cuts, spurred by slowing inflation reflected in recent Producer Price Index (PPI) and Consumer Price Index (CPI) data, have pushed U.S. Treasury bond yields to a three-week low, further supporting gold’s upward momentum.
Meanwhile, geopolitical uncertainties, including the Israel-Hamas ceasefire, are influencing broader sentiment. However, the upbeat tone in equity markets may divert some investor attention from gold.
With key levels in focus and a robust uptrend in place, gold remains a critical asset to watch as 2025 unfolds.
The alignment of bullish technical indicators and favorable macroeconomic conditions suggests that its upward momentum may persist, offering promising opportunities for investors navigating an uncertain landscape.
Featured image via Shutterstock
