Technical analysis by Zayn_Muaath about Symbol PAXG on 5/7/2025

As of May 7, 2025, the XAU/USD (gold) market is experiencing fluctuations influenced by a combination of geopolitical developments, economic indicators, and central bank policies. ⸻📉 Recent Market MovementsGold prices recently declined by 1.3% to $3,383.88 per ounce, retreating after nearly a 3% rise the previous day. This drop comes amid growing optimism over U.S.-China trade negotiations, diminishing the appeal of safe-haven assets like gold. Additionally, markets are focused on the Federal Reserve’s policy decision expected later in the day, with the central bank likely to hold interest rates steady while maintaining flexibility due to uncertainties from the trade war. ⸻🔮 Outlook for XAU/USDDespite the recent pullback, the long-term outlook for gold remains bullish. Goldman Sachs projects that gold will continue to outperform silver due to sustained central bank demand, which has structurally elevated the gold-silver price ratio. Currently, the ratio stands at approximately 102, up from 84.7 a year ago. Factors such as slowing Chinese solar production, high recession risks, and robust bullion purchases by central banks contribute to gold’s stronger performance. Goldman Sachs maintains a bullish outlook on gold, forecasting a base price of $3,700 per ounce by year-end and $4,000 by mid-2026. ⸻📊 Technical Analysis A key resistance level is observed at $2,660, with support around $2,600. A breach below this support could lead to further downside towards $2,500.  ⸻⚠️ Key Factors to Monitor•Federal Reserve’s Policy Decisions: Anticipated rate cuts could influence gold’s appeal.•Geopolitical Tensions: Ongoing conflicts may drive demand for safe-haven assets.⸻✅ ConclusionWhile short-term fluctuations are expected, the long-term prospects for XAU/USD remain positive, supported by strong demand from central banks and geopolitical uncertainties. Investors should monitor key economic indicators and central bank policies for potential impacts on gold prices.  ⸻