- Gold hovers just below $3,000 at the start of the week after reaching a record high on Friday.
- Traders anticipate a volatile week amid geopolitical developments and the upcoming Federal Reserve decision.
- UBS and BNP project gold could climb to $3,200, with a near-term target of $3,020.
Gold (XAU/USD) is trading just under $3,000, hovering near $2,992 on Monday after a take-profit correction following Friday’s record high of $3,005. Traders are preparing for a significant week ahead, with key geopolitical events and the Federal Reserve’s policy decision set to drive market sentiment.
Among the major developments, Germany’s Bundestag is scheduled to vote on a €1 trillion defense spending plan on Tuesday, a move that could boost the European defense industry. On the same day, U.S. President Donald Trump is set to meet with Russian President Vladimir Putin to discuss a potential peace deal for Ukraine.
Adding to the market’s uncertainty, the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) will convene on Tuesday and Wednesday, with traders closely watching the latest monetary policy decision and the Dot Plot projections. While no changes to the current policy are expected, speculation over potential rate cuts in May or June continues to fluctuate.
Market Movers: Key Developments
- U.S.-Russia Peace Talks – President Trump confirmed he will speak with Russian President Putin on Tuesday regarding a potential Ukraine peace agreement. Bloomberg reports that discussions will focus on territorial divisions and asset distribution, with Trump expressing optimism about reaching a deal.
- Gold Price Forecasts – UBS Group AG has joined BNP in predicting gold prices could rise to $3,200 in the second quarter. UBS cites increasing risks of a prolonged global trade war as a key factor driving demand for the safe-haven asset.
- Federal Reserve Expectations – According to the CME FedWatch Tool, there is a 99% probability that the Fed will keep interest rates unchanged in its Wednesday meeting. Meanwhile, the likelihood of a rate cut at the May 7 meeting stands at 27.5%.
Technical Analysis: Eyeing $3,200
The $3,000 level remains a critical psychological and technical threshold. While gold has briefly dipped below this mark, the retracement allows traders to reenter at lower levels. Once $3,000 is firmly reclaimed, upside targets of $3,100 and $3,200 become viable within the coming weeks or months.
The immediate resistance level to watch is Friday’s high of $3,004, followed by the R1 resistance at $2,999. If gold breaks above this zone, intraday traders may look toward R2 at $3,015.
On the downside, the daily Pivot Point at $2,989 has provided support against further losses. A move below this level could see gold testing S1 at $2,973 and S2 at $2,962.
