Gold price steadied above $3,100 on Thursday after briefly climbing to a one-week high, supported by safe-haven demand amid market volatility and tariff tensions. Investors are now focusing on the upcoming US inflation data, which could shape the Federal Reserve’s monetary policy path in the coming months.
Key Highlights for Gold Price
- Gold holds gains above $3,100 despite modest pullback from earlier highs.
- Ongoing US-China trade tensions boost demand for safe-haven assets.
- Fed policymakers emphasize caution on rate cuts amid inflation risks.
- Market awaits critical US CPI and PPI data for fresh policy cues.
- Technical setup remains bullish, with key support seen at $3,060.
Broader Market Sentiment and Impact of US CPI Data
The Gold price continues to benefit from heightened uncertainty sparked by recent tariff moves between the US and China. After the US imposed sharp tariffs, President Trump unexpectedly announced a 90-day pause on duties for most countries. However, he increased tariffs on Chinese imports to 125%, prompting China to retaliate with a 50% tariff on US goods.
This intensifying trade conflict has reignited fears of global inflation and economic slowdown, making investors seek refuge in safe-haven assets like gold. Despite a rally in equity markets, bullion posted its strongest daily gain since October 2023, rising over 2% mid-week.
Meanwhile, expectations of multiple rate cuts by the Federal Reserve this year have been tempered. The latest FOMC minutes and speeches from Fed officials, including Neel Kashkari and Beth Hammack, signal a more cautious stance. Many policymakers voiced concern that tariff-driven inflation could delay or reduce the scope of any rate easing.
“We must remain vigilant. Tariff-led inflation cannot be dismissed lightly,” said St. Louis Fed President Alberto Musalem.
Technical Insights and Price Outlook
From a technical viewpoint, gold demonstrated strength by rebounding from its 200-period Simple Moving Average earlier in the week. The current momentum suggests a possible retest of its all-time highs near the $3,168 mark.
Support levels to watch:
- $3,100 – Minor psychological level
- $3,065–3,060 – Key support zone
- $3,000 – Major support and 200-SMA convergence point
Any dip below $3,100 may attract buyers, with strong support expected around $3,060. A decisive breach below this level, however, could tilt the short-term bias toward the downside, especially if upcoming inflation data surprises to the upside.
Investor Outlook: What’s Next for Gold?
The immediate focus is on the US Consumer Price Index (CPI) data, due Thursday, followed by the Producer Price Index (PPI) on Friday. These releases will provide critical clues about inflation trends and the Fed’s potential actions.
Despite temporary setbacks, the overall environment still favors gold due to lingering geopolitical tensions, uncertain central bank policies, and persistent inflation risks. For now, gold appears well-positioned to maintain its bullish stance, especially if data confirms the need for a softer Fed policy approach.
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