

Market Analysis
Gold prices (XAU/USD) edged lower during the early European session on Wednesday, trimming part of the previous day's significant 1% gain, which was fueled by heightened geopolitical tensions in the Middle East. The risk of a broader conflict escalated following Iran's launch of ballistic missiles at Israel, spurring demand for the safe-haven asset. However, expectations of less aggressive monetary easing by the Federal Reserve (Fed) limited the non-yielding yellow metal's ability to maintain upward momentum.
Meanwhile, the US Dollar (USD) has retained its recovery gains from the past two days, supported by signs of resilience in the US labor market, which has further restricted Gold’s upside. Despite this, XAU/USD remains close to the record high reached last week, and the overall market fundamentals still favor the bulls. Traders are now eyeing the US ADP employment report for short-term direction, while the primary focus remains on Friday's Nonfarm Payrolls report.
Technical Outlook: Gold prices nearing the $2,625-$2,624 support zone could present a buying opportunity.
From a technical standpoint, the recent sharp upward move has confirmed the breakout of a short-term ascending channel resistance, turning the $2,625-$2,624 region into a crucial support level. A decisive break below this zone may trigger technical selling, potentially pushing Gold below the $2,600 threshold and towards the next key support around the $2,560 level, with further downside risk extending to the $2,535-$2,530 area.
Conversely, immediate resistance is expected near the $2,672-$2,673 zone, followed by the $2,685-$2,686 area, which corresponds to the all-time high reached last week. A break above the $2,700 mark could serve as a catalyst for renewed bullish momentum, paving the way for the continuation of the long-standing multi-month uptrend.
Paraphrasing text from "FX Street" all rights reserved by the original author.