Gold Eyes $3,379 as U.S. Debt Jitters Fuel $3,000+ Breakout Momentum

Gold is up for its best week since April and above $3,320 as US debt and a falling dollar make it a safe haven. The US Dollar Index (DXY) is down 1% this week making gold (priced in dollars) more attractive to foreign buyers.

Traders are getting cautious after Moody’s cut the US credit rating and a weak $16 billion Treasury auction showed waning confidence in government bonds. The US House passed a big, beautiful tax-and-spending bill that will add trillions to the national debt as it goes to the Senate.

Geopolitical risk is also playing a role. Iran’s foreign minister warned the US of legal consequences if Israel attacks Iranian nuclear sites, echoing a CNN report on possible Israeli military action. This global risk further supports gold as a financial refuge in uncertain times.

Gold Technical Setup: Channel Support Holds

Gold (XAU/USD) is bouncing off the channel support and the $3,308 level (also 50-period EMA) is providing a solid base. Since bottoming at $3,206 earlier this month price has shown a constructive series of higher lows on the hourly chart.

The latest hourly candles are telling a great story. A bullish engulfing pattern formed right off the channel floor and a spinning bottom (often a reversal signal). The MACD has turned green with histogram bars, indicating upward momentum after consolidation.

Key Levels to Watch:

• Immediate Resistance: $3,322 (intraday high)

• Breakout Target: $3,345, then $3,379

• Support: $3,299 (EMA and trendline)

If gold can get above $3,322 and hold, bulls could drive a breakout to $3,379 as risk off sentiment continues to build.

Trade Setup for New and Seasoned Traders

For those who like this setup, the trade is simple:

• Entry: Above $3,322 on confirmation

• Stop-Loss: Just below $3,299 to protect against a fake out

• Take-Profit: $3,345 (initial), $3,379 (extension)

This trade is good risk-reward if price respects the channel. If price consolidates and breaks clean, momentum will accelerate.

Newbies should watch the upper trendline. Big candles, small pullbacks or a breakout from consolidation are the cleanest trades. With the macro backdrop in place, gold’s upswing is far from done.