Daily Price Outlook
Gold (XAU/USD) maintained its strong bullish momentum, surging to an intra-day high of $2,921 and currently trading around $2,920 on Tuesday.
This rally was driven by heightened trade tensions after former US President Donald Trump confirmed new tariffs on Canada, Mexico, and China. This fueled risk aversion, weakening the US dollar and boosting gold’s appeal as a safe haven, driving prices higher.
Gold Supported by Trade War Escalation and Weaker US Yields
Notably, the US announced that it will impose new tariffs on key trading partners, which prompted immediate retaliation from Canada and China. Canada confirmed a 25% tariff on $30 billion worth of US imports, with additional tariffs on $125 billion in goods set to follow within 21 days.
Meanwhile, China announced additional tariffs of up to 15% on US agricultural imports, including chicken, pork, soy, and beef, effective March 10. This tit-for-tat trade war has increased uncertainty in global markets, driving investors toward safe-haven assets like gold.
At the same time, the broad-based US dollar is losing traction, thanks to declining US Treasury yields. The benchmark US 10-year yield hit a five-month low of 4.11% on Tuesday. this was seen as another key factor that boost Gold price.
US Halts Military Aid to Ukraine, Escalating Geopolitical Tensions and Boosting Gold’s Appeal
On the flip side, Bloomberg reports that the US has "paused" all military aid to Ukraine, with President Trump halting weapons shipments.
Additionally, tensions between Trump and Ukrainian President Volodymyr Zelenskyy escalated after a heated exchange led to the abandonment of a proposed agreement on Ukraine’s rare earth minerals.
These geopolitical risks have heightened market volatility, further boosting gold’s appeal as a safe-haven asset.
US Economic Data and Fed Rate Cut Expectations Impact Gold Price
On the data front, the ISM Manufacturing PMI came in at 50.3, slightly below expectations, while S&P Global’s final Manufacturing PMI for February exceeded forecasts at 52.7.
Meanwhile, the US PCE inflation report showed steady inflation, with monthly headline PCE at 0.3% and annual PCE at 2.6%. However, the CME FedWatch Tool now indicates an 85.6% probability of a Fed rate cut by June, which could further weaken the US dollar and support gold prices.
GOLD (XAU/USD) – Technical Analysis
Gold is trading at $2,887.61, facing downward pressure as it struggles below the pivot point of $2,893.92. The short-term technical setup suggests a bearish bias, with the 50-day EMA at $2,909.11 acting as immediate resistance.
A failure to reclaim this level could reinforce selling momentum, pushing prices toward the first support at $2,859.91, with further downside targets at $2,832.63 and $2,807.60.
On the upside, gold must break decisively above $2,893.92 to challenge resistance at $2,930.44, with a stronger rally possible toward $2,956.85 and $2,978.40 if buyers regain control.
However, given the metal’s inability to sustain gains above key moving averages, near-term risks remain skewed to the downside.
A sell strategy below $2,893 appears favorable, with a take-profit target at $2,859 and a stop-loss placed at $2,915. Traders should watch for price action near support levels, as increased volume around these zones could signal potential reversals.
If selling pressure intensifies, gold could extend its decline toward the $2,832 handle, reflecting broader weakness in the precious metals market.
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