Article by: ETO Markets
Gold prices are pushing towards weekly highs, recently trading near the $… mark, primarily fuelled by escalating global trade tensions which bolster its safe-haven appeal. US President Trump's announcement of a 25% tariff on imported cars, alongside uncertainty surrounding potential reciprocal tariffs, is tempering investor appetite for riskier assets. Providing underlying support is a modest pullback in the US Dollar from its recent three-week peak, coupled with persistent market expectations for two Federal Reserve interest rate cuts later in 2025, despite recent robust US economic data like Durable Goods Orders. However, a recent uptick in US Treasury yields and cautious commentary from several Fed officials regarding inflation and the timing of any rate adjustments are acting as headwinds, potentially limiting further gains for the non-yielding metal. Market sentiment remains largely driven by risk aversion stemming from trade concerns, although caution prevails ahead of key US economic releases, particularly the upcoming PCE Price Index data.
From a technical standpoint, Gold (XAU/USD) closed around $…, maintaining its position above key moving averages like the 20-day SMA (currently near $…) and the 21-day EMA (around $…), reinforcing the underlying uptrend confirmed by a high ADX reading above 46. Immediate resistance is sighted near the recently tested $…-$… weekly high, with a sustained break potentially targeting the all-time peak around the $…-$… region touched on March 20th. On the downside, initial support lies in the $…-$… zone, followed by the significant $… psychological level. A breach of this mark could increase selling pressure towards the next important support confluence area between $…(21-day EMA) and $…(PSAR), which also aligns with recent consolidation lows. Failure to hold this zone might expose the $…-$… region, incorporating a previous horizontal resistance level and the 20-day SMA, acting as a crucial pivotal point below which a deeper correction could unfold. Whilst the overall trend remains bullish, the negative MACD histogram warrants caution regarding weakening short-term momentum.
