13 Feb 2025

• Gold saw some substantial buying on Wednesday when prices were dipping lower. 
• Headwinds are present though, with as a possible peace deal for Ukraine as main tail risk. 
• Gold is back on track to test the all-time high at $2,942.
• Gold's price (XAU/USD) is resuming its upward trajectory observed on Tuesday, currently reaching $2,920 as of Thursday. Bullion traders appear unfazed by the Consumer Price Index (CPI) data for January released by the United States on Wednesday. Additionally, the potential for a peace agreement between US President Donald Trump and Russian President Vladimir Putin, who have recently discussed a forthcoming meeting to negotiate the terms of such an agreement, seems to be of little concern to traders. In spite of these significant risks, Gold continues to rally, indicating a strong commitment from investors to remain invested in this safe haven asset.
  
  Concurrently, traders are analyzing the two testimonies delivered by Federal Reserve (Fed) Chairman Jerome Powell before Congress. The January CPI figures released on Wednesday suggest that the Fed is positioned to maintain interest rates at their current levels for an extended period. Although US yields have surged over the past two days, the recent increase in Gold purchases raises the question of whether US yields can continue to rise alongside Gold, which presents a somewhat contradictory scenario.
• Technical Analysis: Potential Declines Ahead
  
  Gold traders have seized the opportunity presented by January's CPI release to increase their investments in the precious metal. However, a significant tail risk looms that could trigger a swift and severe correction in Gold: the potential for peace talks regarding Ukraine. Should these discussions gain traction and receive backing from Ukraine and Europe, a risk-on sentiment may emerge in the markets, leading to outflows from safe-haven assets and a subsequent decline in Gold prices.
  
  On Thursday, the initial support level is identified at $2,892, corresponding to the Daily Pivot. Following this, the S1 support is anticipated at $2,875, while the S2 support at $2,847 is expected to provide a buffer against further declines towards the more substantial $2,790 level, which represents the high from October 31, 2024.
  
  Conversely, on the upside, the R1 resistance at $2,920 must be reclaimed first, succeeded by the R2 resistance at $2,937. If the upward momentum persists, the $2,950 mark will be tested for a potential breakout. Beyond that, the psychological threshold of $3,000 may be the next target.