Gold’s rally positions it for a record high attempt, with $2,990 in sight, yet bearish divergence in RSI suggests caution as underlying momentum slows.

In a robust performance reflective of the global economic climate, gold prices surged on Wednesday, surpassing significant resistance levels and marking a breakout at $2,930. Notably, the yellow metal reclaimed the 20-Day Moving Average as support after testing a day’s low of $2,906, indicating a strengthening bullish trend. Currently trading at $2,940, gold is positioned to potentially close near historic daily highs. Analysts observe that the upward trajectory is reinforced by the recent bullish retracement from a swing low of $2,833, enhancing the possibility of achieving a new record high with targets setting around $2,978 and $2,990 based on Fibonacci extensions and bearish retracement patterns. Despite these bullish indicators, caution is warranted as there is evidence of a bearish divergence in the relative strength index (RSI), suggesting a gradual weakening of buying momentum. Adding to the complexity, the market faces increased selling pressure driven by potential shifts in economic policy and heightened global market volatility, particularly related to U.S. trade policies. As economic concerns mount, particularly regarding tariffs and diminishing economic growth projections, gold remains an attractive safe-haven asset, gaining traction amid fears of inflation and market instability. Further, with the Federal Reserve's expected interest rate cuts, gold's status as a non-yielding asset becomes more appealing, suggesting that the bullish trend may continue despite fluctuations. As we look ahead, close attention should be paid to upcoming economic indicators such as the U.S. Producer Price Index (PPI), which are likely to impact gold prices in the short term. A successful breach of the $2,930 barrier will be crucial for sustaining upward momentum, while any reversal below this level could indicate a potential pullback towards lower support zones. This article and its analysis have been reviewed and enhanced with the assistance of artificial intelligence, ensuring a comprehensive and insightful perspective on the current gold market dynamics.