Article by: ETO Markets
Gold prices (XAU/USD) traded flat during early European hours on Friday, as concerns over former US President Donald Trump’s proposed reciprocal tariffs provided support to the precious metal. Trump's plan aims to impose tariffs on countries that tax US imports, though a final decision is expected by April 1. A decline in US bond yields also contributed to gold’s stability. However, expectations that the US Federal Reserve will maintain its hawkish stance and keep interest rates higher for longer could weigh on the non-yielding asset. Meanwhile, investors are closely watching the release of US Retail Sales data for January. Economic indicators released on Thursday showed the US Producer Price Index (PPI) rising 3.5% year-over-year in January, exceeding market expectations of 3.2%, with core PPI at 3.6%. Additionally, US Initial Jobless Claims dropped to 213K for the week ending February 8, below the expected 215K, signaling continued strength in the labor market.
From a technical perspective, gold price remains in a strong uptrend on the daily timeframe, holding above the key 100-day EMA. However, with the 14-day RSI in overbought territory above 70.0, traders should exercise caution before anticipating further gains. The immediate resistance lies at the $…-$… zone, the all-time high, with a potential rally toward $… at the upper Bollinger Band and possibly $… if momentum sustains. On the downside, initial support is at $…(February 12 low), followed by $…(January 29 low), while critical support rests in the $…-$… region, aligning with the lower Bollinger Band and 100-day EMA.
