26 Feb 2025

Gold prices are experiencing a slight increase during the early European trading session on Wednesday.

Concerns regarding trade wars among investors are driving safe-haven investments, which in turn supports the price of gold.

Market participants are preparing for the release of the US January New Home Sales data and remarks from Federal Reserve officials later in the day.

The price of gold (XAU/USD) has managed to recover some of its losses after hitting a one-week low in the previous session. The prevailing uncertainty and ongoing apprehensions regarding US President Donald Trump's tariff strategies are providing a degree of support for the yellow metal, which is traditionally viewed as a safe-haven asset.

However, analysts suggest that Trump's intentions to impose higher tariffs have heightened inflation concerns at the US Federal Reserve, potentially leading the central bank to maintain elevated interest rates for an extended period. This scenario could limit the potential gains for the precious metal, as increased interest rates diminish the attractiveness of non-yielding gold.

Later on Wednesday, the US New Home Sales figures for January will be published, and Federal Reserve officials, including Raphael Bostic and Thomas Barkin, are scheduled to deliver speeches. Additionally, attention will be focused on the release of the US Personal Consumption Expenditures (PCE) Price Index for January on Friday.Gold prices are experiencing a slight increase during the early European trading session on Wednesday. Concerns regarding trade wars among investors are driving safe-haven investments, which in turn supports the price of gold. Market participants are preparing for the release of the US January New Home Sales data and remarks from Federal Reserve officials later in the day.

The price of gold (XAU/USD) has managed to recover some of its losses after hitting a one-week low in the previous session. The prevailing uncertainty and ongoing apprehensions regarding US President Donald Trump's tariff strategies are providing a degree of support for the yellow metal, which is traditionally viewed as a safe-haven asset.

However, analysts suggest that Trump's intentions to impose higher tariffs have heightened inflation concerns at the US Federal Reserve, potentially leading the central bank to maintain elevated interest rates for an extended period. This scenario could limit the potential gains for the precious metal, as increased interest rates diminish the attractiveness of non-yielding gold.

Later on Wednesday, the US New Home Sales figures for January will be published, and Federal Reserve officials, including Raphael Bostic and Thomas Barkin, are scheduled to deliver speeches. Additionally, attention will be focused on the release of the US Personal Consumption Expenditures (PCE) Price Index for January on Friday.

Technical Analysis: Increased Pressure

For the second consecutive day, the price of Gold is trading below the daily Pivot Point. While the price action appears stagnant and consolidation is evident, there remains a risk of further declines. The Relative Strength Index on the 4-hour chart indicates potential for additional downside, suggesting that a drop to $2,880 could occur if market conditions worsen again this Wednesday.

On the upside, the initial level to reclaim is the daily Pivot Point at $2,918, which did not provide adequate support during the early trading hours on Wednesday. Should Gold find support in the event of a further decline in US yields, the R1 resistance at $2,948 and the all-time high at $2,956 represent key levels to monitor for upward movement.

Conversely, revisiting Tuesday’s low at $2,890 is a likely scenario. Given that the S1 support is positioned lower at $2,882, there is minimal resistance to further declines. Additionally, pay attention to the $2,878 level (the low from February 17), where significant support may emerge.