Technical analysis by David_financial_analyst about Symbol PAXG: Buy recommendation (6/2/2025)

Spot gold continued its intraday gains, hitting a one-week high near $3,359 in the European session. Concerns about the deteriorating fiscal situation in the United States, coupled with the market's general expectation that the Federal Reserve will cut interest rates again in 2025, have caused the dollar to fall back to near the monthly low; this trend has provided important support for gold.Fundamental analysisU.S. economic data showed that inflationary pressures continued to ease. Data released by the United States last Friday showed that the personal consumption expenditures (PCE) price index in April increased by 2.1% year-on-year, hitting a new low since February 2021. The core PCE price index, which excludes volatile food and energy prices, rose 2.5% year-on-year, down from 2.7% in March. This data further strengthened the market's expectations for the Federal Reserve to cut interest rates.Federal Reserve Governor Christopher Waller said on Monday that even if the Trump administration's tariff policy may temporarily push up price pressures, a rate cut later this year is still possible. Traders continue to bet that the Federal Reserve will cut interest rates in September and expect another rate cut in December. Several FOMC members will speak this week, including an appearance by Fed Chairman Jerome Powell later on Monday, which will provide important clues about the outlook for monetary policy.According to Reuters, geopolitical risks continue to heat up. Ukraine launched a large-scale drone attack on military airports in five Russian regions on the eve of the second round of direct peace talks. Meanwhile, Israel strongly denied involvement in the incident that killed at least 30 Palestinians and accused Hamas of firing on hungry civilians gathered to receive humanitarian aid. These geopolitical tensions provided additional support for safe-haven asset gold.Technical:From the daily chart, spot gold successfully broke through the key resistance area of ​​$3325-3326, triggering a technical buying influx. The price is running below the upper Bollinger Band at $3409.08, the middle track at $3295.04 provides dynamic support, and the lower track at $3181.00 constitutes far-end support.The important resistance above is at the integer level of $3,400 and the previous high of $3,430, and the support below is $3,300 and $3,250 respectively.The MACD indicator shows that the DEA line is 23.11 and the DIF line is 22.85. The narrowing distance between the two lines indicates that an upward crossover signal may appear.In terms of the RSI indicator, the 14-day RSI is 56.63, which is in a strong position in the neutral area, suggesting that there is still room for growth. The RSI indicator shows a gradual upward trend, forming a positive correlation with the price trend, confirming the effectiveness of the current upward trend.Market sentiment observationThe current market sentiment is clearly biased towards risk aversion. The general pressure on the equity market reflects the decline in risk appetite, and funds flow to traditional safe-haven assets such as gold. The US dollar index fell back to near the monthly low, providing additional support for gold prices. The market's expectations for the Fed's monetary policy shift are constantly heating up. The interest rate cut in September is almost a foregone conclusion, and expectations of another interest rate cut in December are also increasing.Traders are watching the intensive speeches of Fed officials this week, especially Powell's speech, for more clues on the direction of monetary policy. At the same time, important economic data will be released at the beginning of the month, including the ISM manufacturing PMI on Monday, which will provide the market with the latest assessment of the health of the US economy. Geopolitical uncertainty continues, and the situation in Ukraine and tensions in the Middle East provide continued safe-haven demand support for gold.OutlookShort-term outlook: With technical breakthroughs and positive fundamentals, gold is expected to test the $3,400 round mark in the short term. If it can effectively break through this position, it will open up further room for growth to the previous high of $3,430. However, traders are wary of profit-taking pressure, and the $3,325-3,330 area has become an important support.Long-term outlook: The Fed's expectations of a rate cut cycle, continued geopolitical risks, and concerns about the US fiscal situation will continue to support the medium- and long-term trend of gold. However, if US economic data is stronger than expected or the Fed's stance turns hawkish, it may limit gold's gains. Traders are concerned about the effectiveness of the medium-term support of $3,250, and the loss of this position may change the current upward pattern. XAUUSD GOLD XAUUSD GOLD