Gold prices (XAU/USD) are on the rise during early European trading hours on Friday. Growing concerns about US President Donald Trump’s tariff plans are providing support to the precious metal. Additionally, a decline in US bond yields across the curve is contributing to the upward trend.
However, the US Federal Reserve’s (Fed) hawkish stance and higher interest rates could weigh on gold prices. Traders are closely watching the release of US Retail Sales data for January, due later on Friday.
Gold Price Rises Amid Global Trade War Fears
On Thursday, Trump unveiled a plan to impose reciprocal tariffs on countries that levy duties on US imports. However, officials need time to study these tariffs, and implementation is not expected until April 1.
The US Producer Price Index (PPI) rose 3.5% year-over-year in January, surpassing market expectations of 3.2%. The annual core PPI also increased, reaching 3.6% compared to the revised 3.7% in December.
Initial Jobless Claims for the week ending February 8 fell to 213K, below the market consensus of 215K. These factors are influencing gold prices, as investors seek safe-haven assets.
Technical Analysis: Gold Price Trends and Key Levels
Gold’s broader trend remains positive, but the overbought Relative Strength Index (RSI) suggests caution for buyers. On the daily chart, gold prices are holding above the 100-day Exponential Moving Average (EMA), indicating a strong uptrend.
The first resistance level is at 2,942−2,942−2,943, near the all-time peak touched on Tuesday. A break above this level could push prices toward 2,955andpotentially2,955andpotentially3,000.
On the downside, initial support lies at 2,864,thelowofFebruary12.Furthersupportisat2,864,thelowofFebruary12.Furthersupportisat2,744, the low of January 29, and the crucial 2,680−2,680−2,685 region, which aligns with the 100-day EMA.
What’s Next for Gold Prices?
While gold prices are gaining momentum, the Fed’s monetary policy and global trade tensions will play a key role in determining future trends. Investors should monitor upcoming economic data and geopolitical developments to make informed decisions.
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