17 Feb 2025

Gold experienced a resurgence on Monday, buoyed by ongoing weakness in the US Dollar. Concerns regarding President Trump’s tariffs further enhance the appeal of the safe-haven XAU/USD pair. Both the fundamental and technical indicators suggest the potential for further upward movement.

During the early European session on Monday, the price of gold (XAU/USD) maintained its intraday gains near the $2,900 level, although it remains within a range below the record high reached last week. The US Dollar (USD) is trading close to its lowest point since December 17, a reaction to the disappointing US Retail Sales figures released on Friday. Additionally, apprehensions that President Trump’s tariffs may instigate a global trade conflict serve as significant factors supporting the demand for this safe-haven asset.

The US Dollar remains close to its lowest point since December 17, a decline attributed to disappointing US Retail Sales figures released on Friday, which in turn has stimulated demand for Gold. The US Census Bureau indicated that Retail Sales fell by 0.9% in January, significantly worse than the anticipated decrease of 0.1% and the revised 0.7% increase from December.

Market reactions have swiftly adjusted, now incorporating expectations of a Federal Reserve rate cut in September rather than later in the year, which further supports the precious metal's value. Kevin Hassett, Director of the US National Economic Council, noted that a 40 basis points drop in the 10-year US Treasury yield may signal market expectations of lower inflation.

Additionally, US President Donald Trump has instructed officials to develop plans for reciprocal tariffs against countries that impose taxes on US imports, although he has refrained from announcing specific levies. Furthermore, Trump has warned that tariffs on automobiles could be implemented as early as April 2, raising concerns about a potential global trade war and bolstering the XAU/USD.

As US and Russian officials are set to engage in discussions in Saudi Arabia, Russian military actions in eastern Ukraine have intensified, further increasing demand for this safe-haven asset.

1. Current Trend & Structure  
The chart illustrates a pronounced upward trend that has been evident since late 2022, characterized by a series of higher highs and higher lows. The recent price movements are situated near the upper boundary of the chart (approximately 2,850–2,900), indicating that gold is trading close to its recent peaks.

2. Key Support Levels  
2,800–2,810 Zone  
This range aligns with a recent consolidation base. Should the price experience a decline, this area is likely to attract buyers.  
2,750–2,760 Range  
This level represents a previous swing high from January. Following a breakout above this point, the market retraced to this zone before continuing its upward trajectory.  
2,700 (Psychological/Previous Pivot)  
This round number serves as a pivot point from December. In the event of a significant price drop, it may act as a stronger support level.

3. Key Resistance Levels  
2,900–2,920 Range  
This range marks the most recent high. A sustained breakout above this zone would confirm ongoing bullish momentum.  
3,000 (Psychological Level)  
Should the price surpass the recent high, the 3,000 level represents a significant psychological barrier and a round-number resistance that traders typically monitor.

4. Potential Price Targets  
Short-Term (Days to a Few Weeks)  
Upside: A successful breakout above the 2,900–2,920 range could aim for the 3,000 level.  
Downside: A failure to maintain current levels may first test the 2,800 zone, followed by 2,750 if selling pressure intensifies.  

Medium-Term (1–3 Months)  
Upside: The continuation of the broader uptrend could lead to targets exceeding 3,000, provided that fundamental factors such as safe-haven demand and shifts in monetary policy remain favorable.  
Downside: Should global conditions or market sentiment change, deeper pullbacks could challenge the 2,700 level or lower, which would still be consistent with an uptrend as long as key support levels are upheld.

5. Additional Considerations  
Volatility: Gold prices can be influenced by macroeconomic news, central bank decisions, and geopolitical events.  
Confirmation: It is advisable to monitor for breakouts or breakdowns accompanied by increased trading volume for more reliable confirmation.  
Risk Management: It is essential to establish stop-loss orders and position sizes in relation to these critical levels.