Gold prices have continued to push higher, touching a two-week high as trade tensions, expectations of a Fed rate cut, and a lower US Dollar drive strong support. Concerns that the economic costs of President Trump’s tariffs on steel and aluminum imports would prompt the EU and Canada to respond with their own measures have fuelled demand for safe-haven assets such as gold. In addition, hopes for multiple rate cuts this year by the Federal Reserve amid a slowing labor market and decreasing inflation have only added to gold’s allure. With the US Dollar close to multi-month lows, technical considerations indicate that gold could go higher, potentially into its all-time high of $2,956.

KEY LOOKOUTS

• Concerns about increasing US President Trump tariffs and heightened trade tensions against the EU and Canada remain pushing safe-haven demand for gold.

• Gold’s attractiveness grows with hopes for several Federal Reserve interest rate reductions this year under diminishing inflation and signs of moderation in the labor market.

• A low US Dollar, closer to multi-month lows, contributes to further bullish support for gold, which has made it an even more sought-after asset for alternative assets investors.

• Gold’s recent breakout above major resistance levels indicates additional upside potential, with the all-time high of $2,956 within reach if the momentum continues.

Gold prices have been trending higher, fueled by fears of rising trade tensions, especially President Trump’s tariffs and retaliatory actions by the EU and Canada. These concerns have prompted investors to seek refuge in gold. Moreover, anticipation of several Federal Reserve rate reductions in the course of this year, driven by the evidence of deceleration in the labor market and decelerating inflation, has supported the attractiveness of gold further. The US Dollar, downgraded to multi-month levels, still supports gold, with it remaining an investor darling. With technical levels pointing toward ongoing momentum, gold is looking to test its record high, which further entrenches the bull case for the metal.

Gold prices are rising, boosted by increasing trade tensions and Federal Reserve rate cut hopes. Weakness in the US Dollar is also boosting gold’s attractiveness, bringing it near its all-time high.

• Increasing fears surrounding US tariffs and retaliation from the EU and Canada are compelling investors to seek safety in havens such as gold.

• Wagers on several Federal Reserve rate reductions this year are supporting gold, as diminishing rates enhance the attractiveness of non-yielding assets.

• A battered US Dollar, close to multi-month lows, is also lending support to gold, making it more appealing to investors.

• Concerns over possible economic repercussions from trade wars and slowing inflation are still driving demand for gold.

• A break above crucial resistance levels, such as $2,928-2,930, indicates additional upside potential, potentially reaching its record high of $2,956.

• A lower-than-expected US inflation reading has boosted the rate cut expectations further, supporting gold’s price rally further.

• While geopolitical uncertainties increase, gold continues to be a top choice as a hedge against market uncertainty, showing strong upward momentum in the short run.

Gold prices have been trending higher on increased concerns about trade tensions, mainly President Trump’s steel and aluminum tariffs on foreign imports and resulting retaliations by the EU and Canada. Such fears of future economic slowdown are prompting investors towards gold, long regarded as a safe-haven investment when markets are uncertain. The growing market volatility from the current trade tensions has further driven demand for gold, as it is seen as a safe store of value amid geopolitical uncertainty.

GOLD DAILY PRICE CHART

CHART SOURCE: TradingView

Besides trade worries, hopes for several Federal Reserve rate cuts throughout the year have also helped to increase gold’s appeal. With signs of a cooling labor market and easing inflation, many market participants are betting that the Federal Reserve will ease monetary policy, which supports non-yielding assets like gold. Meanwhile, a weakening US Dollar continues to provide favorable conditions for gold, as it makes the precious metal more attractive to investors looking for alternatives. Consequently, gold is in a solid uptrend, with investors following developments in the global economy very closely.

TECHNICAL ANALYSIS

Gold prices have demonstrated strong bullish momentum, overcoming key resistance levels, such as the $2,928-2,930 range, opening the way for additional potential on the upside. The price action suggests gold is ready to test its all-time high of $2,956, with oscillators on the daily chart still firmly in positive ground, indicating room for further extension without touching overbought levels. So long as gold remains above the pivotal $2,930 support level, the outlook is good, and the rising trend can extend towards new highs.

FORECAST

Gold prices are set to maintain their rising trend, driven by persisting trade tensions and a softening US Dollar. As investor worries regarding the economic effect of tariffs and the risk of slowing down remain, demand for safe-haven gold should be firm. Furthermore, if Federal Reserve rate-cut hopes become a reality, this will add support to gold, taking prices to the all-time high of $2,956. With technical indicators continuing to reflect positive momentum, gold may break resistance levels and experience additional gains in the near future.

Conversely, however, if the geopolitical environment stabilizes and trade tensions subside, there may be a gold price pullback as investor interest in safe-haven investments dissipates. A better-than-expected economic recovery or more aggressive Federal Reserve tightening of monetary policy could also blunt the attractiveness of gold. In these situations, gold could come under pressure, dropping back towards support levels near $2,912-$2,900 and potentially even lower in the event of a shift in favorable market conditions toward risk assets.