Gold price forecast: XAU/USD in 5-day trading range as traders assess stagflation risks
Gold prices have been consolidating within a 1.8% range over the past five trading days, with support at $2,877 and resistance at $2,930.
After a 1% decline yesterday to a five-day low near $2,877, the price found support at a bullish order block, leading to a rebound in today’s Asian session as gold rose by 0.5% and is now trading near $2,900 in the European session. However, further upside faces a technical challenge at the 50 EMA on the 4-hour chart, which stands at $2,905.
The recent market sentiment has been shaped by concerns over a weakening U.S. economy. U.S. President Donald Trump recently addressed the state of the economy, referring to it as a “period of transition” as policies aimed at bringing “wealth back to America” take time to show effects.
At the same time, gold traders have taken profits in wary of stagflation risks. This is due to the Atlanta Fed GDP model which projects a sharp downturn, with the first-quarter 2025 forecast at -2.4%, marking the first negative print since the COVID-19 pandemic. These conditions contribute to gold’s price fluctuations, as investors weigh safe-haven demand against the need for liquidity in a slowing economy.
Gold price outlook: RSI shifts neutral as price struggles below 50 EMA
Gold price dynamics (Feb 2025 - March 2025). Source: TradingView.
The recent price rebound has shifted the four-hour RSI from bearish territory to a neutral level, suggesting that selling pressure has eased. However, gold remains below the 50 EMA resistance at $2,905, making it a critical level to watch for potential breakout or rejection.
While the current economic slowdown could drive more investors toward gold, the presence of strong resistance levels within the consolidation range suggests price action may remain choppy. If gold fails to break above $2,905, traders may continue to take profits, limiting upside potential. Economic developments and market sentiment will determine whether gold extends gains or continues consolidating in the near term.
Gold gained support from safe-haven demand as U.S. trade policy uncertainty increased. Technically, it consolidated between $2,930 and $2,895 holding above the 50-day EMA.
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