Daily Price Outlook
Gold price (XAU/USD) prolonged its upward trend and hit an all-time high of $2,954 during the European session on Thursday.
The surge came as investors worried that US President Donald Trump’s trade tariffs could lead to a global trade war, increasing demand for safe-haven assets like gold.
Apart from this, US Treasury bond yields continued to drop, making the US Dollar weaker and further supporting gold prices.
Despite this rally, gold’s gains might slow down as the Federal Reserve’s hawkish meeting minutes confirmed that interest rates will remain high for an extended period.
This could limit new buying activity, especially since gold is already in slightly overbought territory. However, the overall trend remains bullish, and the precious metal is likely to continue its upward momentum in the coming weeks.
Gold Rises as US Dollar Weakens Amid Trade Tensions and Fed Caution
On the US front, the broad-based US Dollar is struggling to stop its losses as US Treasury bond yields take another dip. This weakness in the dollar is helping Gold (XAU/USD) stay strong.
Moreover, US President Donald Trump announced that he will impose heavy tariffs on several products next month or even sooner. This has increased fears of rising trade tensions, pushing investors toward safe-haven assets like gold.
Meanwhile, US Commerce Secretary Howard Lutnick said Trump aims to abolish the Internal Revenue Service (IRS) and shift the tax burden to outsiders.
However, Trump also mentioned that a new trade deal with China is possible, which could ease some concerns.
On the flip side, the Federal Reserve (Fed) minutes from its January meeting revealed that officials are cautious about making any interest rate changes due to uncertainty in the economy.
Fed Vice Chairman Philip Jefferson noted that while inflation has eased, it remains high, and the path to the 2% target may be unpredictable.
Chicago Fed President Austan Goolsbee also stated that inflation is still excessive, and interest rates can only drop once inflation comes down further. Despite these remarks, the US dollar failed to gain strength, keeping gold well-supported.
Looking ahead, traders will keep an eye on Thursday’s US economic data, including weekly jobless claims and the Philly Fed Manufacturing Index. Speeches from key Federal Reserve members could also impact the market.
On Friday, global PMI data will provide fresh insights into economic conditions worldwide, which could influence gold’s next move.
GOLD (XAU/USD) – Technical Analysis
Gold (XAU/USD) is trading at $2,945.47, inching up by 0.02%, as the metal maintains its bullish stance. The price action remains above the key pivot point at $2,934.03, suggesting continued buying interest.
The 50-day Exponential Moving Average (EMA) at $2,911.04 is acting as dynamic support, reinforcing positive sentiment. The market’s attention is focused on the immediate resistance at $2,966.23, with a breakout above this level potentially driving gold towards $2,983.93 and $3,001.64.
Conversely, on the downside, $2,893.87 serves as initial support, with the next safety nets at $2,877.33 and $2,853.75. A break below $2,934.03 could shift momentum, triggering short-term selling pressure. However, the broader uptrend remains intact as long as prices stay above the 50-day EMA.
From a technical perspective, the bullish outlook is supported by the ongoing formation of higher highs and higher lows, in line with the ascending trendline. Traders are eyeing a decisive close above $2,966.23 to confirm continued bullish momentum. Conversely, failure to sustain above $2,934.03 may prompt a corrective pullback.
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