Article by: ETO Markets
Gold prices (XAU/USD) trade near weekly highs during the Asian session on Wednesday, extending a rebound from last week's low amid ongoing concerns over the economic impact of US President Donald Trump's trade tariffs. Safe-haven demand for gold remains strong as investors anticipate a tariff-driven slowdown in the US economy, reinforcing expectations of multiple Federal Reserve (Fed) rate cuts this year. Despite a modest recovery in the US Dollar (USD) ahead of key inflation data, optimism surrounding the passage of a US funding bill and Ukraine's willingness to accept a US-brokered ceasefire with Russia has improved market risk sentiment, limiting gold’s upside potential. Trump's recent move to double tariffs on Canadian steel and aluminum briefly bolstered gold prices, though he later softened his stance following Ontario’s decision to suspend a surcharge on US electricity. Meanwhile, the Republican-controlled House narrowly passed a spending bill to avert a government shutdown, but it still requires Senate approval. Adding to economic uncertainty, Trump hinted at potential recession risks, while signs of a cooling US labor market have strengthened expectations of Fed rate cuts, with markets pricing in three 25-basis-point reductions by year-end. While this supports gold bulls, traders are cautiously awaiting US inflation data, which could shape the Fed’s policy path and drive further movement in the precious metal.
From a technical standpoint, gold bulls need a decisive break above the $…–… resistance zone to confirm further upside momentum, potentially targeting the all-time high of $… reached on February 24. A sustained rally beyond this level could reinforce the prevailing uptrend, especially with daily chart oscillators still indicating bullish momentum. Conversely, a drop below $… could see initial support near $…, followed by $…. A deeper decline might lead to a test of the late February swing low at $…–…, with a further slide potentially extending toward the key psychological level of $….
