Article by: ETO Markets

Gold prices (XAU/USD) recovered modestly during the Asian session on Tuesday, reversing part of Monday’s decline from near a one-month high. Reports from Bloomberg indicated that President-elect Donald Trump’s economic advisers are considering a gradual tariff ramp-up plan aimed at boosting negotiating leverage and avoiding a sudden spike in inflation. This news led to a pullback in US Treasury bond yields, reviving demand for the non-yielding yellow metal. However, the uptick in gold remains constrained due to hawkish Federal Reserve expectations, which were reinforced by last week’s strong US Nonfarm Payrolls (NFP) data. The NFP report strengthened the case for the Fed to proceed cautiously with rate cuts, supporting the US Dollar and preventing a deeper correction in bond yields from their recent highs. Meanwhile, optimism over easing fears of disruptive trade tariffs under the incoming Trump administration improved investor confidence, further limiting gold’s appeal as a safe haven. Traders are now focused on upcoming US inflation data, starting with the Producer Price Index (PPI) today and the Consumer Price Index (CPI) on Wednesday, which could provide fresh impetus for gold and other markets. 

From a technical perspective, any sustained move above the $…–… zone is expected to face initial resistance near $…, followed by the critical $… level. A break beyond $… could extend the ongoing uptrend, targeting the $…–… area before testing the December monthly swing high around $…. On the downside, the $…–… zone, corresponding to Monday’s low, serves as immediate support. A decisive break below this level may expose gold to further declines toward the $… region, with the downward momentum potentially extending to the $… level, which aligns with the 100-day Exponential Moving Average (EMA) and a long-standing ascending trend line.