Gold Struggles to Break $5,400 Mark. BlackRock Says Rally Is Far From Over

TradingKey - Cooling tensions in the Middle East and a stronger U.S. dollar have caused gold prices to stall, but bullish sentiment on Wall Street remains high.

On March 11 (GMT+8), spot gold ( XAUUSD) continued its volatile trend, hovering around $5,200 per ounce. Last Monday (March 2), gold prices briefly rose to $5,400 but failed to climb further, maintaining high-level consolidation. Currently, the gold price trend is showing a symmetrical triangle pattern, implying a 50% probability for both upside and downside moves.

Gold price chart, Source: TradingView

In January this year, gold prices surged to nearly $5,600, an increase of over 70%, triggering profit-taking by technical funds at that level. Additionally, while Middle East tensions have not fully subsided, recent signs of diplomatic mediation have led to a brief withdrawal of some "panic premium" from gold.

Another factor easily overlooked is the resilience of the U.S. dollar, which has also weighed on gold prices. With the Trump administration nominating hawk Kevin Warsh as Federal Reserve Chair, market expectations for prolonged high interest rates have risen, driving a rebound in the U.S. Dollar Index. This creates a headwind for dollar-denominated gold. Since January 27, the U.S. Dollar Index has continuously rebounded from a low of 95, approaching the 100 mark, with a cumulative gain of 5%.

U.S. Dollar Index chart (4H), Source: TradingView

In the view of BlackRock ( BLK ), gold prices will continue to rise, supported primarily by geopolitical uncertainty, rigid demand for de-dollarization from central banks, global sovereign debt deficits (especially in the U.S.), and spillover effects from stablecoins and the AI economy. Kristy Akullian, Head of iShares Investment Strategy at BlackRock, stated, "The precious metals market has experienced unprecedented gains in recent months. Although it has now entered a much more volatile phase of the cycle, this bull market is far from over."

However, BlackRock is not alone in its bullish stance on gold; many Wall Street institutions share this attitude. Among them, Bank of America ( BAC) has a price target of $6,000, while UBS believes gold will rise to $6,200 in March. Despite the prevailing high bullish sentiment and potential for even more aggressive targets, maintaining a cautious bullish outlook is a safe strategy.