Daily Price Outlook
Gold prices (XAU/USD) extended their bullish momentum, reaching an intra-day high of $2,922. The recent surge is largely attributed to a decline in US Treasury bond yields, which weakened the US Dollar and made gold more attractive to investors.
Furthermore, growing fears of a global trade war, fueled by former US President Donald Trump’s aggressive tariff policies, have intensified demand for gold as a safe-haven asset.
Despite gold’s strong upward trend, the concerns over rising US inflation persist. On the data front, the latest Consumer Price Index (CPI) report revealed a higher-than-expected increase in consumer prices, reinforcing speculation that the Federal Reserve will maintain its hawkish stance.
Hence, the prospect of prolonged high interest rates could pose challenges for gold’s rally, as rising US Treasury yields and a stronger Dollar typically reduce the appeal of non-yielding assets like gold.
US Dollar Struggles Amid Inflation Concerns and Trade Tariffs, Supporting Gold Prices
On the macroeconomic front, the US Dollar has struggled to gain momentum, providing additional support for gold. The latest US inflation report initially triggered market volatility, but persistent concerns over former US President Donald Trump’s newly imposed tariffs kept safe-haven demand strong.
Trump’s decision to impose a 25% tariff on steel and aluminum imports, along with threats of additional tariffs on countries with high levies on US goods, has heightened market uncertainty.
On the data front, the US inflation data showed that consumer prices surged in January, with the CPI rising by 0.5%, marking the highest increase since August 2023. The annual inflation rate climbed to 3%, while core inflation (excluding food and energy) rose to 3.3%, exceeding market expectations.
Federal Reserve Chair Jerome Powell has emphasized that inflation remains a key concern, making it unlikely that the central bank will cut interest rates until inflation moves closer to the 2% target.
Meanwhile, strong US economic data, including robust job market performance and GDP growth, further supports the Fed’s cautious stance.
Investors are now turning their attention to the upcoming Producer Price Index (PPI) report, which could provide additional clarity on inflation trends.
If inflation remains elevated, gold and silver prices may face resistance, but if inflation shows signs of easing, both metals could continue their bullish momentum.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2917.37, showing slight downside pressure as it hovers just below its pivot point of $2922.88. The 50-day EMA at $2900.68 provides a crucial support level, reinforcing near-term stability. However, the bearish sentiment remains intact as long as gold stays below the pivot.
On the upside, immediate resistance stands at $2943.27, with a breakout potentially pushing gold towards $2959.89 and ultimately $2975.96. However, recent price action suggests that buyers are struggling to gain control, making a sustained move above these levels uncertain.
On the downside, immediate support is set at $2898.08, followed by $2879.70 and $2864.94. A break below these levels could accelerate selling momentum, with traders eyeing the next key levels for potential entry points.
The entry strategy favors selling below $2922, targeting $2900 as a take-profit level, while stop-loss is set at $2935 to manage risk. The overall trend suggests cautious bearish sentiment, with gold needing a decisive breakout above resistance levels to shift momentum back in favor of buyers.
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