Article by: ETO Markets
Gold prices (XAU/USD) rebounded after hitting a one-week low, supported by lingering concerns over U.S. President Donald Trump’s tariff policies, which have fueled market uncertainty and increased demand for the safe-haven asset. However, analysts caution that Trump's push for higher tariffs has heightened inflation fears at the Federal Reserve (Fed), potentially leading to prolonged high interest rates that could limit gold’s upside, as higher rates diminish the appeal of non-yielding assets. Market participants are closely watching key economic indicators, including U.S. New Home Sales data and speeches by Fed officials Raphael Bostic and Thomas Barkin on Wednesday, with particular attention on Friday’s U.S. Personal Consumption Expenditures (PCE) Price Index for January. Meanwhile, Trump signed an Executive Order directing a probe into Copper markets, reinforcing trade war concerns, and reaffirmed that tariffs on Canadian and Mexican imports remain on track despite efforts to strengthen border security. Adding to economic concerns, U.S. consumer confidence saw its steepest decline since August 2021, falling to 98.3 from 105.3, according to the Conference Board. Richmond Fed President Barkin signaled a cautious, wait-and-see approach to interest rate policy until inflation clearly trends toward the Fed’s 2% target, while Dallas Fed President Lorie Logan suggested shifting the Fed’s portfolio toward shorter-term securities to better align with Treasury issuance.
From a technical perspective, gold prices edge higher but remain confined within a narrow trading range in the near term. However, the broader bullish outlook remains intact as the price holds above the key 100-day Exponential Moving Average (EMA), with the 14-day Relative Strength Index (RSI) near 64.0, signaling upward momentum. The all-time high of $… remains a strong resistance level, with a breakout potentially driving prices toward $…, the upper boundary of the Bollinger Band, and ultimately the psychological $… mark. On the downside, initial support lies at $…, the February 25 low, with further declines potentially testing $…, the lower Bollinger Band limit. A more significant drop could challenge the critical $… level, aligning with the 100-day EMA.
