GOLD Analysis
Afternoon: Gold Extends Weekly Gains Amid Trade War Fears & Inflation Concerns
Highlights:
- Gold eyes an eighth weekly gain amid fears over Trump’s tariff policies and rising inflation risks
- Fed policymakers advocate keeping interest rates unchanged due to persistent economic uncertainties.
- Switzerland’s gold exports to the US surged to a 13-year high, offsetting lower shipments to China and India.
Overview:
Gold prices maintained their upward momentum, poised for an eighth consecutive weekly gain, as worries over US trade policies and inflation risks supported safe-haven demand. Investors remained cautious following US President Donald Trump’s aggressive tariff policies, which could potentially escalate trade wars and fuel inflation, making gold a preferred hedge against economic uncertainty.
Federal Reserve's Inflation Worries & Policy Stance
Federal Reserve officials expressed concern over inflation risks stemming from trade, immigration, and broader economic policies. Fed Governor Adriana Kugler reinforced the cautious stance, stating that keeping the federal funds rate unchanged for now is the most suitable course given the current balance of economic risks. Traders are now closely monitoring upcoming US inflation data and Fed signals, which could influence market expectations regarding interest rate movements.
Switzerland Gold Exports Surge Despite Weak Demand in Asia
In physical markets, Switzerland's gold exports surged year-on-year in January, with shipments to the United States hitting their highest level in at least 13 years, according to Swiss customs data. This uptick compensated for reduced gold deliveries to major consumers like China and India, signaling a potential shift in global gold demand patterns.
Key Economic Data to Watch
Market participants are closely monitoring upcoming macroeconomic data, including:
- German Flash Manufacturing PMI & Flash Services PMI (Euro Zone)
- US Flash Manufacturing PMI, Flash Services PMI, Existing Home Sales
- Revised University of Michigan Consumer Sentiment Index
Technical Analysis & Trade Strategy
- Action: Sell around $2930, targeting $2909, with a stop loss above 2940
Support and Resistance Levels:
