GOLD Analysis
Afternoon: Gold Prices Under Pressure Amid USD Recovery and Trade War Concerns
Highlights:
- Gold prices dip 0.65%, trading near $2,750 due to a recovering US Dollar.
- Renewed trade tensions and emergency tariff policies revive safe-haven demand.
- Fed rate cut expectations and falling US Treasury yields limit gold’s downside.
Market Analysis
- USD Recovery Pressures Gold:
The US Dollar recovered by 0.25% from a one-month low, driven by renewed trade war fears. President Trump's emergency tariffs on Colombian imports, along with potential tariffs on Mexico and Canada, have weighed on risk appetite globally, indirectly pressuring gold prices.
- Fed Rate Cuts and Bond Yields:
Expectations of Federal Reserve rate cuts and falling US Treasury bond yields have tempered the strength of the USD, limiting significant losses in gold prices. Investors anticipate that lower interest rates will weaken the dollar, making gold more attractive as a store of value.
- Geopolitical Risks Boost Safe-Haven Demand:
Global trade uncertainties, fueled by Trump's aggressive tariff policies, have heightened market fears, increasing demand for safe-haven assets like gold. However, gold remains sensitive to upcoming US economic data and geopolitical developments, which could drive further volatility.
Technical Analysis
Support Levels:
Immediate support is at $2,736, a pivotal level to sustain bullish momentum.
A break below $2,736 could trigger further losses toward $2,700 and $2,665.
Resistance Levels:
Immediate resistance lies at $2,772, with a retest of $2,790 likely on sustained recovery.
The next psychological barrier stands at $2,800.
Trade Action:
Sell Near $2770 targeting 2740 with stop loss above 2785
or
Buy near $2,740-$2,750, targeting $2,790-$2,800, with a stop loss below $2,735.
Outlook
Gold prices are trading near $2,750, with support at $2,736 acting as a key level for price direction. While the USD recovery weighs on the metal, Fed rate cut expectations and safe-haven demand provide substantial downside support. Traders should focus on upcoming US economic indicators like Durable Goods Orders and the Consumer Confidence Index for further clarity on gold's short-term trajectory.
Gold remains under pressure but poised for potential upside if geopolitical tensions and dovish central bank policies continue to dominate market sentiment.
Support and Resistance Levels:
