Article by: ETO Markets
The gold price (XAU/USD) is experiencing downward pressure on Tuesday after reaching $… during the Asian session, primarily due to strengthening US Dollar demand sparked by President Trump's trade tariff threats. Trump's announcements about potential 25% tariffs on Colombian imports and planned tariffs on pharmaceuticals, computer chips, aluminium, and copper have revived inflation concerns, pushing US Treasury yields higher. However, the gold price's downside appears limited due to market expectations of two Federal Reserve interest rate cuts by year-end, reinforced by Trump's demands for immediate rate reductions, along with concerns about the economic impact of his trade policies. Traders are now focusing on upcoming US economic data and the two-day FOMC meeting for further market direction.
From a technical perspective, gold's technical outlook remains cautiously bullish, with the XAU/USD showing resilience below the 23.6% Fibonacci retracement level of the December-January rally, supported by positive daily oscillator readings and a breakout above the $…-… horizontal barrier. The key support levels to watch are the overnight low around $…, followed by the $…-… area (38.2% Fibonacci level) and the $… region (50% Fibonacci level). On the upside, resistance levels are positioned at $…-…, followed by the overnight swing high at $…-…, and the October 2024 peak near $…, with the all-time high around $…. A breakthrough above $… could trigger further bullish momentum, potentially extending the month-long uptrend.
