Gold Advances on US Debt Worries, Risks in Russia-Ukraine

Key Takeaways:

*Gold rallies as investors seek refuge amid rising US debt and credit downgrade.

*Russian missile and drone attacks escalate in Russia-Ukraine, undermining ceasefire hopes.

Market Summary:

Gold prices rose on Tuesday, buoyed by safe-haven flows as investors grew increasingly nervous over US fiscal uncertainty and a resurgence in geopolitical risk stemming from renewed Russian aggression in Ukraine. Spot gold continued to trend higher toward a key resistance level, benefiting from both macroeconomic fears and geopolitical instability.

Markets remain focused on the fallout from Moody’s US debt downgrade, as well as the budgetary impact of Trump’s proposed fiscal package, which could add trillions to an already bloated debt profile. These developments have cast a shadow over the dollar and spurred demand for hard assets like gold, which traditionally performs well during periods of fiscal stress.

Geopolitical tensions also returned to the fore after Russia launched its heaviest aerial assault since the beginning of the war, targeting multiple civilian areas across Ukraine with over 300 drones and nearly 70 missiles. The renewed violence followed Trump’s failed ceasefire attempt, which analysts say lacked any meaningful diplomatic leverage. Despite high-level calls between Trump and Putin, the Kremlin has escalated hostilities, and Western intelligence sources now expect a possible Russian summer offensive.

Technical Analysis:

GOLD, H4 

Gold is currently testing key resistance at $3355.00, after a sustained bullish rally. Momentum indicators suggest a potential near-term pullback. MACD is showing signs of a possible death cross, while RSI has retreated from overbought levels to 60, suggesting fading momentum.

A successful break above 3355.00 could expose the next resistance at $3440.00, while failure to break may trigger a short-term retracement toward support at $3240.00.

Resistance levels: 3355.00, 3440.00

Support levels: 3240.00, 3120.00