Article by: ETO Markets

Gold prices (XAU/USD) hit a record high during the Asian session on Tuesday but later retreated due to profit-taking amid a stronger US Dollar (USD). The surge was driven by safe-haven demand following US President Donald Trump's announcement of 25% tariffs on steel and aluminum, with plans for additional reciprocal tariffs, raising concerns of a global trade war. Inflation fears, fueled by Trump's protectionist policies, also supported gold as a hedge against rising prices. However, upbeat US employment data and inflation concerns bolstered expectations that the Federal Reserve (Fed) would maintain interest rates, strengthening the USD. Market attention now shifts to Fed Chair Jerome Powell's testimony for insights on future rate decisions, which could impact gold's direction. 

From a technical perspective, Gold (XAU/USD) is likely to find support near the $…-… zone if it slides below $…, with further downside limited to around $… unless a decisive break occurs. Conversely, the $…-… region now acts as a strong resistance, with the overbought RSI suggesting a potential consolidation or pullback before resuming its uptrend. Despite short-term fluctuations, the broader technical setup favors continued bullish momentum, reinforcing the prevailing uptrend observed over the past two months.