14 Feb 2025

• Gold price flat lines in Friday’s early European session. 
• Trade war fears and lower US bond yields support the precious metal. 
• Investors brace for the US January Retail Sales data, which is due later on Friday.
  

Gold prices (XAU/USD) remain stable during the early hours of European trading on Friday. Increasing apprehensions regarding US President Donald Trump's tariff proposals lend some support to the precious metal. Furthermore, a decrease in US bond yields across the spectrum enhances the appeal of gold.

Nonetheless, the anticipation that the US Federal Reserve (Fed) will maintain its hawkish approach and sustain elevated interest rates for an extended period may exert downward pressure on the non-yielding yellow metal. Market participants will be attentive to the upcoming release of US Retail Sales data for January, scheduled for later on Friday.\

On Thursday, Trump presented a strategy for implementing reciprocal tariffs on all nations that levy duties on imports from the United States. However, officials in commerce and economics must evaluate the implications of these reciprocal tariffs against countries that impose tariffs on American goods, with a deadline set for April 1.

According to the US Bureau of Labor Statistics, the Producer Price Index (PPI) in the United States increased by 3.5% year-over-year in January, following a 3.3% rise in December. This figure exceeded market expectations, which were set at 3.2%.

Additionally, the annual core PPI experienced a 3.6% increase year-over-year in January, slightly down from the revised figure of 3.7% (originally reported as 3.5%) in the previous month, surpassing the forecast of 3.3%.

Furthermore, the Initial Jobless Claims in the United States for the week ending February 8 decreased to 213,000, down from the previous week's revised figure of 220,000 (originally reported as 219,000), and below the market consensus of 215,000.

The gold price is currently exhibiting a robust upward trend on the daily chart, as it remains positioned above the significant 100-day Exponential Moving Average (EMA). Nevertheless, the 14-day Relative Strength Index (RSI) is situated in the overbought zone, surpassing the 70.0 mark, which suggests a degree of caution is advisable before making any further investment decisions aimed at capitalizing on potential gains.

The primary resistance level for gold is identified in the $2,942-$2,943 range, which corresponds to the all-time high reached on Tuesday. Should the price continue to rise, it may target $2,955, the upper limit of the Bollinger Band. A definitive breakthrough above this threshold could lead to a movement towards the psychological level of $3,000.

Conversely, the first support level is established at $2,864, corresponding to the low recorded on February 12. Further declines may bring attention to an additional support level at $2,744, the low from January 29. The critical support zone is found within the $2,680-$2,685 range, which aligns with the lower boundary of the Bollinger Band and the 100-day EMA.