Monitoring geopolitical developments and market reactions to recent tariff announcements will be crucial, as these factors significantly influence gold's price movements.
10 Feb 2025
Gold prices remain a focal point for safe-haven investments due to ongoing concerns regarding Trump's trade tariffs. Positive employment data from the United States, coupled with inflationary pressures, may enable the Federal Reserve to maintain current interest rates. Additionally, a slight strengthening of the US Dollar could limit the upward movement of the XAU/USD pair, particularly in light of its overbought status.
Gold prices (XAU/USD) maintain a bullish trend during the initial part of the European session on Monday, reaching a new all-time high in the vicinity of $2,896-$2,897 within the last hour. Ongoing concerns regarding the potential economic repercussions of US President Donald Trump's tariffs, along with escalating trade tensions between the US and China, continue to enhance the appeal of this safe-haven asset. Additionally, fears that Trump's protectionist measures may trigger inflation in the United States further reinforce gold's reputation as a hedge against rising prices.
Simultaneously, the US Dollar (USD) is experiencing some follow-through buying, driven by expectations that the Federal Reserve (Fed) will maintain its hawkish approach in light of a resilient US labor market and persistent inflationary pressures. However, this development does little to diminish the demand for non-yielding gold or impede its strong upward movement during the day. It is important to note that overbought conditions on the daily chart may deter traders from initiating new bullish positions in the XAU/USD. Nonetheless, the prevailing fundamental conditions indicate that the most likely trajectory for the commodity remains upward.
Recent Rally:
Over the past few sessions, gold has been showing an upward bias. Prices moved from levels around $2,850 up to a recent high in the vicinity of $2,885–$2,890. This indicates that buyers are stepping in, pushing the price higher over a relatively short time.
Consolidation:
After reaching near-term highs, the price has settled slightly lower, hovering in the mid-$2,870 range. This consolidation suggests that the market is taking a pause, with both bulls and bears reassessing the next move.
Key Levels Identified:
- Resistance: The area around $2,900 has been tested in the recent move. A sustained break above this level could be seen as a bullish signal.
- Support: On the downside, $2,850 appears to be a solid support level where buyers have previously stepped in.
Technical Outlook and Target for Today
If Bullish Momentum Continues:
- Breakout Scenario: Should the price break and hold above the $2,900 resistance level, it could trigger further buying interest.
- Potential Target Range: In such a case, gold might aim for the next stretch up, targeting levels in the $2,920–$2,940 range as intraday highs.
If the Trend Reverses or Consolidates:
- Pullback Scenario: If the price fails to clear the $2,900 mark and faces selling pressure, expect a pullback toward the support zone.
- Support Zone: The $2,850 level should be watched closely for signs of a bounce.
Final Thoughts
The past performance suggests that XAU/USD is in a generally bullish phase with immediate resistance near $2,900. Today’s target, therefore, hinges on whether the price can overcome this barrier. Keep an eye on the price action around these levels, and be prepared for potential volatility, especially if new market developments occur.
