- Bulls have returned gold prices above the psychological resistance of $2,900 per ounce at the beginning of this week after losses at the end of the week reached the support level of $2,877 per ounce.
- Amid a US holiday today that may affect liquidity and investors' appetite for risk, the gold price index remains hovering near a record high, as traders absorb the latest US inflation reading and statements by Federal Reserve Chairman Jerome Powell.
US Inflation Impacts Central Bank Expectations
According to official data results, inflation in the United States of America rose widely at the beginning of the year, which further reduced the chances of a US interest rate cut by the Federal Reserve this year at the same time that the Trump administration is pressing on tariffs. Regarding the future of US interest, US President Donald Trump called for a reduction in interest rates while Jerome Powell was testifying before the House Financial Services Committee and before that before Congress.
In response to Trump’s request, Powell said during testimony that the US central bank “will make decisions on interest rates as we go along,” adding that inflation data shows “we’re close but not far enough on inflation.” He told senators that the Fed would be patient before easing monetary policy further.
With the minutes of the last meeting awaited, policymakers kept US interest rates unchanged at their first meeting of the year last month as they wanted to see more progress in moderating inflation.
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Will the Gold Price Rise in the Coming Days?
According to trades on gold trading platforms, the price of gold has risen strongly this year, setting successive record highs and may be preparing to test the $3,000 per ounce level. The rise has been supported by increased demand for safe havens as US President Donald Trump launched a series of aggressive moves on trade, including a planned tax on steel and aluminum imports. Traders are trying to read the potential consequences for the US economy and monetary policy if the White House's stance on trade and immigration rekindles inflation and affects growth. During his latest testimony, Powell said it was unwise to speculate on tariff policy.
Now, gold prices are on an upward trajectory and could remain so for some time. In addition to what has been mentioned, the recent bullion rally has been accompanied by inflows into bullion-backed exchange-traded funds. Global holdings are up 1.2% so far this year, reaching their highest level since November, according to Bloomberg calculations.
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Please note that gold is one of the most important safe-haven assets, and therefore, the continuation of geopolitical and global trade tensions is a fertile environment for gold prices to rise in the coming days.
The Decline in the Dollar Supports the Gold Market
According to forex market trades, the US Dollar Index fell below the support level of 106.6 after much weaker-than-expected retail sales figures raised concerns about the strength of US consumer spending. US retail sales fell by -0.9% last month, compared with expectations of a smaller decline of -0.1%, and control sales, which are used to calculate GDP, fell by 0.8%. Consumer spending is likely to be affected by severe weather and wildfires in Los Angeles. At the same time, both the US consumer price index and the producer price index exceeded expectations, although components of the producer price index that feed into the personal consumption expenditure index, the Federal Reserve's preferred inflation measure, showed signs of slowing.
Overall, the data reinforced the US Federal Reserve's cautious stance on cutting US interest rates, as Fed Chairman Powell confirmed to Congress that the US central bank is not in a hurry to ease policy. On the trade front, Trump signed a directive ordering the US trade representative and commerce secretary to propose new country-specific tariffs, a process that could take weeks or months. Investors are waiting for more details and remain optimistic that negotiations could avoid duties.
Elsewhere, gold is weighing on the market. The yield on the 10-year US Treasury note fell below the 4.5% threshold on Friday, extending the aggressive pullback from the previous session after new data challenged the long-term outlook for a resilient US consumer.
Gold Price Technical Analysis and Expectations Today:
According to the daily chart, the overall trend of gold prices is still upward. According to today's gold analysts' forecasts, the bulls are preparing to launch towards the historic psychological peak of $3,000 per ounce as long as geopolitical and global trade tensions continue and central banks increase their purchases of gold and work to ease their monetary policy. Currently, the closest resistance levels for gold prices are $2,925, $2,945, and $2,965 per ounce. Furthermore, please note that continued gains move technical indicators towards strong overbought levels. Decisively, we still prefer buying gold from any downward level but without risk
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