Gold prices are trading near weekly highs above $2,765 as it continues its steady climb, driven by declining US bond yields and increasing concerns over the economic impact of former President Donald Trump’s proposed trade tariffs. While the hawkish pause by the Federal Reserve retains a semblance of stability in the US Dollar, sliding Treasury yields and expectations of future policy easing lend support to the non-yielding metal. Investors remain cautious as the market awaits key economic events, which include the European Central Bank (ECB) decision and the US Q4 GDP report. As for technicals, the cue of moving above the resistance zone of $2,772-$2,773 could provide room for a higher move toward $2,786 and even the record high of $2,790. However, the $2,745 support break below could attract some selling pressures, which is more likely at $2,730-$2,725.

KEY LOOKOUTS

• The Federal Reserve’s rate hold puts some immediate easing before policy but keeps the US Dollar resilient enough to cap the uptrend of the Gold.

• Sliding US Treasury yields weaken the US Dollar, enhancing Gold’s appeal as a safe-haven asset amid economic uncertainty and inflation concerns.

• Potential economic fallout from Trump’s tariff plans increases market volatility, driving safe-haven demand for Gold as investors assess global trade risks.

• A breakout above $2,772-$2,773 could push Gold toward all-time highs, while a drop below $2,745 may trigger further downside.

Gold prices continue upward, driven by a mix of economic uncertainty, sliding US bond yields, and safe-haven demand amid worries over Donald Trump’s trade policies. The Fed’s hawkish pause keeps the US Dollar relatively strong, thereby limiting immediate upside potential for gold, but future policy easing and lower interest rates continue to buoy bullish sentiment. Investors are careful to follow the key technical levels and, in the event of a breakdown above $2,772-$2,773, prices may move up towards all-time highs at $2,790. However, a fall below $2,745 could be seen carrying on further downward pressure. Therefore, the next price move will largely depend on the upcoming European Central Bank’s decisions and US economic releases.

Gold prices remain strong amid economic uncertainty, sliding US bond yields, and trade concerns. A breakout above $2,772 could push prices higher, while support near $2,745 remains crucial. Investors await key economic data for further direction.

• XAU/USD trades above $2,765, supported by declining US bond yields and safe-haven demand.

• The Federal Reserve’s decision to hold interest rates steady keeps the US Dollar strong, limiting Gold’s upside potential.

• Sliding US Treasury yields weaken the USD making Gold more attractive as a non-yielding asset.

• Worries about an economic backlash from the proposed Trump tariffs boost safe-haven demand for Gold.

• Breaking above $2,772-$2,773 may take Gold up to the $2,786-$2,790 area, very close to its all-time highs.

• A slide below $2,745 may provide the catalyst for further declines, strong supportive below $2,725-$2,730.

• Investors focus on the ECB policy decision and US Q4 GDP report for further market direction.

Gold prices continue to trade near weekly highs, benefiting from sliding US bond yields and safe-haven demand amid growing economic uncertainty. The Federal Reserve’s hawkish pause has kept interest rates steady, supporting the US Dollar and limiting Gold’s gains. However, fears of the economic implications of Donald Trump’s trade tariffs and his calls for lower interest rates have further fueled expectations of future monetary easing, adding to Gold’s appeal. Declining US Treasury yields have also further weakened the USD, making the non-yielding yellow metal an attractive investment option. Investors are currently closely following the European Central Bank (ECB) policy decision and the release of US Q4 GDP later today for more market direction.

XAU/USD Daily Chart

TradingView Prepared by ELLYANA

Gold is still strong at current levels near weekly highs while investors continue reacting to economic uncertainty, falling US bond yields, and trade policy concerns. The hawkish Federal Reserve stance has provided some support to the US Dollar. However, with expectations of further rate cuts and inflationary pressures, the upside momentum of Gold remains favored. A breakout above the $2,772-$2,773 resistance zone would push prices to $2,786 and test the all-time high of $2,790. However, if Gold is unable to sustain its gains, a break below $2,745 could fuel further declines. Support could then be found around $2,725-$2,730. Market participants are focusing on the major economic events, such as a policy decision by the European Central Bank and US PCE inflation data, which will define the next move for Gold.

TECHNICAL ANALYSIS

Gold (XAU/USD) remains bullish as it broke above its major resistance zone of $2,720-$2,725. The next major sell-off area is at $2,772-$2,773, and a successful breakout above that may send the prices to the range of $2,786-$2,790 and close to all-time highs. Positive oscillators on the daily chart support the continuation of the rally. On the downside, initial support is placed at $2,745 with stronger support placed in the area of $2,725-$2,730. A move below these will continue to see selling pressure accelerating, and eventually, prices are expected to plummet to $2,707 and then to $2,684. Market participants will be focused on market sentiment and key events in the economic calendar to gauge the next directional move in the price of Gold.

FORECAST

Gold prices are likely to move higher as bullish momentum is further supported by the decline in US bond yields, economic uncertainty, and safe-haven demand. A breakout above the key resistance at $2,772-$2,773 could open the door for an extended rally toward $2,786, followed by the all-time high near $2,790. If buying pressure continues, a further push beyond the $2,800 psychological level could trigger fresh bullish sentiment, reinforcing Gold’s well-established uptrend. Also, there is an expectation of further future monetary easing by the Federal Reserve and geopolitical tensions, which can be the reasons for further surge in Gold’s price in the future sessions.

Yet, the bullish view cannot fully remove the vulnerability of Gold towards possible downside corrections. If the price fails to hold above $2,772, it might revisit the immediate support zone of $2,745. A further fall towards this area is likely to continue the pressure back towards the previously resistance-turned support zone of about $2,725-$2,730, and increased U.S. dollar strength or higher-than-forecast U.S. economic data has the potential for Gold to even fall as far as $2,707 if it fails through the support about $2,684. Market participants will closely monitor upcoming economic events, including the European Central Bank’s (ECB) policy decision and the US PCE inflation data, which could dictate short-term price fluctuations.