Gold price (XAU/USD) continues its upward momentum, reaching new highs in the European session on Wednesday. The ongoing US-China trade tensions and expectations of further Federal Reserve (Fed) rate cuts in 2025 are key drivers behind the surge. Additionally, the weaker US Dollar (USD) strengthens gold’s appeal as a safe-haven asset. Despite a positive risk tone fueled by the US administration’s delay in tariffs on Canada and Mexico, the overall trend for gold remains bullish. However, the overbought Relative Strength Index (RSI) suggests potential short-term pullbacks.
Gold Price Boosted by Trade War Concerns and Weaker USD
The US-China trade conflict escalated as China responded to US tariffs with countermeasures. This development heightened global economic uncertainties, pushing investors toward gold. The latest Job Openings and Labor Turnover Survey (JOLTS) revealed a decline in job openings to 7.6 million from 8.09 million, signaling a weakening labor market. This raises expectations that the Fed may implement further rate cuts, pressuring the USD and benefiting gold prices.
Additionally, President Donald Trump postponed the 25% tariff on Canadian and Mexican goods by 30 days, offering slight relief to the market. However, this move had minimal impact on gold’s bullish momentum, as investors continue to seek safe-haven assets amid economic uncertainties.
Key US Economic Events to Watch
Wednesday’s US economic data includes the ADP employment report and the ISM Services PMI. These indicators will provide further insights into the US economy and influence USD movements, potentially impacting gold prices.
The primary focus remains on Friday’s Nonfarm Payrolls (NFP) report, a crucial employment indicator. Any significant deviation from expectations could trigger market volatility, affecting gold price trends. Additionally, any updates on US tariffs and global trade developments will further shape investor sentiment.
Gold Price Faces Resistance Amid Overbought RSI
From a technical standpoint, gold’s recent breakout beyond the $2,800 level confirms its strong upward trajectory. However, the RSI on hourly and daily charts indicates slightly overbought conditions, suggesting a potential pause before the next leg higher.
In case of a pullback, initial support lies around $2,830, followed by a stronger support zone near $2,800. A deeper correction could extend toward the $2,773-$2,772 range, where buyers may re-enter the market. A decisive break below this level could trigger further downside, leading to increased selling pressure.
Conclusion
Gold price continues to rise amid global trade concerns and expectations of Fed rate cuts. While market sentiment remains bullish, traders should exercise caution due to overbought technical indicators. Upcoming US economic data, especially the NFP report, will play a crucial role in determining short-term price movements. For further gold market insights, visit Daily Gold Signal and explore daily gold updates for the latest trends.
