Gold prices (XAU/USD) have been holding steady around the $2,900 mark during the European session. Despite this stability, the precious metal has struggled to build momentum, staying below its recent all-time high. Several factors, including global trade tensions and Federal Reserve policies, are influencing this trend.
Safe-Haven Demand Supports Gold Prices
Investors remain cautious as concerns over a potential global trade war persist. US President Donald Trump’s tariff policies have fueled fears, boosting demand for gold as a safe-haven asset. This has helped maintain the metal’s appeal despite a modest uptick in the US Dollar (USD).
Federal Reserve’s Hawkish Stance and USD Revival
The Federal Reserve’s commitment to maintaining higher interest rates has revived USD demand. This has limited gold’s upward movement. Additionally, optimism around US-Russia talks to resolve the Ukraine conflict has tempered risk sentiment, further capping gold’s gains.
US Retail Sales Data and Market Reactions
Recent US Retail Sales data revealed a 0.9% decline in January, worse than expected. This has led markets to anticipate a potential rate cut by the Federal Reserve in September. Such expectations have provided some support to gold prices, as lower interest rates typically benefit non-yielding assets like gold.
Technical Outlook for Gold Prices
From a technical perspective, the Relative Strength Index (RSI) on the daily chart has eased from overbought levels. This suggests a near-term constructive outlook for gold. However, resistance near 2,925couldlimitfurthergains.Onthedownside,supportlevelsat2,925couldlimitfurthergains.Onthedownside,supportlevelsat2,885 and $2,855 may offer buying opportunities.
Global Trade Tensions and Gold’s Appeal
Trump’s threats of reciprocal tariffs and potential levies on automobiles have heightened trade war concerns. These developments have bolstered gold’s role as a hedge against economic uncertainty. Meanwhile, escalating tensions in Ukraine continue to drive demand for safe-haven assets.
Key Levels to Watch for Gold Prices
Gold prices face immediate resistance near 2,925,withtheall−timehigharound2,925,withtheall−timehigharound2,942-2,943 acting as a significant barrier. A break above this level could signal further bullish momentum. On the downside, support at 2,885and2,885and2,855 may prevent significant declines.
Conclusion
Gold prices remain influenced by a mix of factors, including Federal Reserve policies, trade tensions, and safe-haven demand. While the metal faces resistance near $2,925, its overall outlook remains positive. For more insights on gold price trends, visit Daily Gold Signal. Additionally, explore the latest updates on gold prices at Daily Gold Update.
