Gold price forecast have surged to a record high of $2,800, continuing their strong uptrend seen in recent weeks. The safe-haven appeal of gold remains strong due to ongoing geopolitical uncertainties and trade tensions. Additionally, concerns about inflation due to US economic policies contribute to the increasing demand for the precious metal.
Despite gold’s bullish momentum, traders are exercising caution as they await the release of the US Personal Consumption Expenditure (PCE) Price Index, a key indicator for inflation trends. The Federal Reserve’s recent stance and rising US Treasury bond yields also play a role in influencing gold price forecast.
Gold Price Benefits from Trade War Concerns Ahead of US PCE Data
US President Donald Trump reaffirmed his stance on imposing 25% tariffs on Mexico and Canada, key US trade partners. Additionally, he warned of possible 100% tariffs if BRICS nations attempt to replace the US Dollar. Such uncertainties have reinforced gold’s role as a safe-haven asset.
Japan’s Joint Staff Office (JSO) reported that Russian military aircraft recently conducted extended flights over the Sea of Okhotsk and the Sea of Japan, further intensifying global geopolitical tensions.
In economic data, the US Bureau of Economic Analysis (BEA) revealed that the Gross Domestic Product (GDP) grew at an annualized rate of 2.3% in the fourth quarter. This marked a slowdown from the previous quarter’s 3.1% growth and fell short of the expected 2.6% growth rate, reinforcing gold’s appeal amid economic uncertainty.
Concerns persist that protectionist policies from the US administration could trigger inflation. Meanwhile, the Federal Reserve’s cautious stance provides moderate support to US Treasury bond yields. The central bank recently indicated that it is in no rush to lower interest rates unless inflation and job market conditions warrant a shift.
The US Dollar has managed to recover from its recent one-month low. A positive sentiment in the equity markets has also prevented gold from making further gains. Traders now look ahead to the release of the US PCE Price Index, which could provide further direction for gold prices.
Technical Outlook: Gold Bulls Hold Control Above $2,773-$2,772 Zone
From a technical perspective, sustaining a position above the $2,800 level could act as a catalyst for further bullish momentum. However, the daily Relative Strength Index (RSI) is nearing the overbought zone, suggesting a potential pause or slight pullback before another upward move.
A corrective decline may find solid support near the $2,773-$2,772 range. Below this, the next support level is positioned at $2,758-$2,756, which, if breached, could lead to further declines toward the $2,740 mark. A more significant breakdown below $2,725-$2,720 would indicate a shift in sentiment, potentially opening the door for further downside movement in the near term.
Conclusion
Gold prices continue to hover near record highs as geopolitical risks and economic uncertainties drive investor demand. The upcoming release of the US PCE Price Index will be a crucial factor in determining gold’s short-term direction. Traders should remain cautious, watching key technical levels for potential market movements.
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