Gold prices (XAU/USD) have pulled back from their all-time highs as a modest rebound in USD demand, driven by the Federal Reserve’s conservative approach to rate cuts and profit-taking among traders, took hold. Even so, downside action is contained as fears of a global trade war, ignited by former U.S. President Donald Trump’s plans for tariffs, continue to underpin safe-haven demand for gold. Also, inflation concerns and geopolitical tensions, notably the Russia-Ukraine conflict, further support bullion’s allure. Although the technical configuration implies a short-term consolidation, the overall trend is bullish, with traders keeping close tabs on important support levels and future economic releases for additional market guidance.

KEY LOOKOUTS

• U.S. Dollar strength and the Federal Reserve’s reluctance to cut interest rates could be controlling short-term gold price action.

• The announced tariffs by Trump and the resulting risk of a global trade war could fuel inflationary concerns and drive the safe-haven demand for gold.

• Rising tensions between Russia and Ukraine, particularly Ukrainian drone strikes against Russian oil facilities, could further enhance the appeal of gold as an insurance against uncertainty.

• Support levels of $2,900 and $2,880 could be good buying levels, while a breakout above $2,955 would indicate additional upside strength.

Gold prices still oscillate on the back of a multi-pronged confluence of forces, including the strength of USD, fears over trade war, and tensions over geopolitics. Although a partial recovery in the U.S. The cautious stance of the Federal Reserve and Dollar toward reducing rates has set off some profit-taking, yet the downside is contained owing to continued fears over inflation and world trade volatility. Trump’s policies on tariffs and new geopolitical concerns, like the Russia-Ukraine war, continue to bolster gold’s safe-haven appeal. Technically, the major support in the range of $2,900-$2,880 is likely to lure buyers, and a breakout above $2,955 is likely to propel further upside momentum, maintaining the overall bullish trend intact.

Gold prices pull back slightly from all-time highs on USD recovery and profit-taking, but trade war anxiety and geopolitical tensions remain supportive of bullish momentum. Major technical levels in the range of $2,900-$2,880 are likely to serve as buying zones, and a breakout above $2,955 is likely to trigger further gains.

• XAU/USD pulls back from all-time highs as profit-taking and a soft rebound in USD demand.

• The Federal Reserve’s conservative attitude towards rate reductions and USD strength cap further advances in gold prices.

• Trump’s tariff announcements drive inflation worries and boost gold’s safe-haven demand.

• Russia-Ukraine tensions and rising global uncertainties continue to bolster bullion as a hedge.

• Inflation expectations keep gold in favor in spite of price volatility in the short term.

• Primary support levels between $2,900-$2,880 would be where purchasing interest could find buyers, or a break through $2,955 could induce further increases.

• U.S. PMI figures, sales of homes, and consumer sentiment index can contribute to gold’s short-term course.

Gold remains a safe-haven favorite against increasing worries on global economic tensions and geopolitical fears. The recently announced trade plans by previous U.S. President Donald Trump, such as further tariffs on Chinese imports and higher duties on steel and aluminum, have triggered concerns of a possible global trade war. These actions can fuel inflationary pressures, which will make gold an attractive hedge against inflation. Moreover, economic worries due to a weaker consumer sentiment, evidenced by Walmart’s lower-than-expected sales projection, further increase the demand for gold as investors want stability.

 XAU/USD Daily Price Chart

TradingView Prepared by ELLYANA

Geopolitical risks remain also a main driver of gold’s safe-haven demand. The Russia-Ukraine conflict, specifically Ukrainian drone strikes on Russian oil infrastructure, contributes to market uncertainty and further boosts the appeal of gold as a risk-free asset. At the same time, conflicting signals from Federal Reserve officials about inflation and possible rate cuts lead to uncertainty in financial markets, causing investors to diversify into gold. As global economic and political uncertainties continue, gold continues to be a reliable store of value during volatile times.

TECHNICAL ANALYSIS

Gold is still in a robust uptrend even as it pulls back temporarily from record highs. The recent spillover over the $2,928-$2,930 resistance levels indicates further bullish pressure, and $2,955 will be the next critical barrier on the upside. On the flip side, protection is visible at $2,900, followed by $2,880, which may act as buying areas for buyers interested in entering longs. The Relative Strength Index (RSI) is still near the overbought zone, suggesting short-term consolidation prior to the next leg up. A convincing breakout above $2,955 may pave the way for higher gains, but a breakdown below $2,880 may confirm a more pronounced correction.

FORECAST

Gold’s medium- and long-term uptrend remains firm, although short-term corrections are inevitable given different economic and geopolitical considerations. On the bullish side, if gold continues its strength above the $2,928-$2,930 resistance levels, a breakout above $2,955 may propel prices upwards. Robust safe-haven demand, fueled by geopolitical tensions and inflation fears, may propel a rally to the $3,000 level. Moreover, any dovish Federal Reserve policy or soft U.S. economic data may also support gold’s rise, drawing new buyers into the market. On the bearish side, profit-taking and a modest rebound in the U.S. Dollar may cause a short-term pullback.

Key support levels of $2,900 and $2,880 will be important in ascertaining the extent of any correction. A breakdown below these levels could see a further fall to $2,860 or even $2,834. Yet, with the underlying macroeconomic uncertainties, any deep fall is expected to be supported by buying interest, capping the downside risk and preserving gold’s overall bullish outlook.