24 Feb 2025

Gold prices are consistently supported by ongoing concerns regarding President Trump's tariff initiatives.

Additionally, the recent wave of USD selling and inflation apprehensions provide further backing for XAU/USD.

However, expectations of a hawkish Federal Reserve are limiting any significant upward movement for the non-yielding yellow metal.

During the Asian trading session on Monday, gold prices (XAU/USD) are facing challenges in gaining substantial momentum, remaining within a trading range that has persisted for several days, close to the record high reached last week. The uncertainty related to President Trump's trade tariffs and their potential effects on the global economy, coupled with a general risk-averse sentiment, continues to bolster demand for the safe-haven asset. Furthermore, geopolitical tensions and ongoing selling pressure on the US Dollar (USD) are additional factors supporting the commodity.

    Approximately $2,940 - $2,950: This price range has been tested on several occasions, indicating a phase of consolidation and difficulty in surpassing this threshold.
    Beyond $2,960: Should gold decisively exceed $2,950, the subsequent target may be in the vicinity of $2,980 or higher.
Concerns regarding the potential economic repercussions of US President Donald Trump's tariff initiatives have contributed to the safe-haven Gold price achieving gains for the eighth consecutive week, reaching a new record high last week. Since assuming office, Trump has enacted a 25% tariff on steel and aluminum, along with an additional 10% tariff on imports from China, and indicated last week that he would unveil new tariffs within the next month or sooner.

Data released on Friday heightened fears about the US growth outlook, resulting in the US Dollar declining to its lowest level since December 10, which further bolstered demand for the commodity. The flash S&P Global US Composite PMI fell to 50.4 in February, down from 52.7 in January, indicating a slowdown in overall business activity within the private sector amid concerns surrounding Trump's tariff policies.

In a separate report, the University of Michigan revealed that its US Consumer Sentiment Index unexpectedly dropped to a 15-month low of 64.7 in February, compared to the previous month's final reading of 71.7. Additionally, households are anticipating inflation to rise to 4.3%—the highest level since November 2023—over the coming year, which enhances the precious metal's appeal as a hedge against increasing prices.

The stronger US consumer inflation data, coupled with hawkish minutes from the Federal Open Market Committee (FOMC), suggests that the Federal Reserve may maintain steady interest rates for an extended duration, presenting a challenge for the non-yielding yellow metal. The upcoming release of the US Personal Consumption Expenditures (PCE) Price Index on Friday will be pivotal in shaping market expectations regarding the Fed's rate outlook and may provide new momentum for the XAU/USD.

This week's US economic calendar also includes the preliminary Q4 GDP figures and Durable Goods Orders scheduled for release on Thursday, which, along with remarks from key FOMC members, will influence demand for the US Dollar.
Support Levels:

    Approximately $2,900: This level serves as a psychological barrier and has previously been a significant point of price reaction.
    In the range of $2,860 - $2,880: This area is likely to act as a robust support zone where the price has historically rebounded.

Price Target:

    If gold manages to break above $2,950, the next upward target could be between $2,980 and $3,000.
    Conversely, if gold fails to overcome the resistance and declines, it may revisit the $2,900 level or lower.

Technical Indicator (RSI Observation):

    The RSI is currently oscillating between 50 and 55, suggesting a neutral momentum.
    A rise above 70 may indicate overbought conditions and potential resistance.
    A decline below 40 could point to weakness and further downward movement.