- Concerns over a widening global trade war continue to support gold prices, which are currently hovering around the resistance level of $2,915 per ounce.
- At the time of writing the analysis, this follows a recovery from last week's profit-taking that pushed prices down to the support level of $2,877 per ounce.
- Furthermore, the recent performance confirms the strength of our frequently recommended trading strategy of buying gold at every dip.
Will Gold Prices Rise Further in the Coming Days?
Based on recent performance, gold prices are likely to remain on an upward trajectory. Gold investors remain uncertain about whether US President Trump's reciprocal tariff plan will escalate global trade tensions, bolstering the appeal of gold bullion as a safe-haven asset. However, hawkish comments from Federal Reserve officials have limited further gains. Federal Reserve Governor Michelle Bowman reaffirmed her cautious stance on further interest rate cuts in the face of persistent inflation.
Similarly, Federal Reserve Governor Christopher Waller favoured pausing US interest rate cuts until inflationary pressures subside. Investors are now eagerly awaiting the release of the minutes of the Fed’s latest meeting, tomorrow, Wednesday, which may provide more details on the policy outlook. On the geopolitical front, investors continue to monitor developments in the potential ceasefire agreement between Russia and Ukraine.
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The Strengthening US Dollar Halts Gold Gains
The US Dollar Index (DXY), which measures the performance of the US dollar against a basket of major currencies, has risen above the 107-resistance level today, recouping recent losses. The US dollar reacted to signals from Federal Reserve officials that the US central bank should refrain from rushing to resume interest rate cuts while remaining focused on curbing inflation. Federal Reserve Governor Christopher Waller suggested a pause in rate cuts based on recent economic data, unless inflation behaves similarly to 2024. Federal Reserve Governor Michelle Bowman also called for patience, urging the Fed to wait for more evidence that inflation is on track to reach its 2% target, while Philadelphia Fed President Patrick Harker called for keeping US interest rates steady amid a strong economy.
Meanwhile, the US dollar faced pressure last week due to mixed US economic data and easing concerns about aggressive tariffs. Meanwhile, treasury Secretary Scott Bessent added that they are now considering currency manipulation as part of their broader trading strategy.
Trading Tips:
Dear TradersUp follower, we still recommend buying gold from every downward level but without risk and activating profit and stop loss orders to ensure the safety of your trading account from any sudden price reversals.
Gold Price Technical Analysis and Expectations Today:
"Dear reader, based on the daily chart performance and gold analysts' forecasts, the overall stronger trend for gold prices remains upward. Gains have continued even after the 14-day Relative Strength Index - a measure of the speed and change of price movements - indicated that the precious metal had reached overbought levels in recent sessions. At the same time, the US dollar hovered near a two-month low, making bullion less expensive for buyers holding other currencies. Considering that money managers cut their bullish bets on gold to a four-week low in the week ended February 11, according to the latest Commitment of Traders report from the Commodity Futures Trading Commission on Friday.
Despite Friday's decline, bullion prices are still registering their seventh straight weekly gain, the longest winning streak since 2020. Gold prices are on track to hit the historic peak of $3000. Keep a close eye on the demand for gold purchases by central banks, even after a ceasefire agreement is reached between Russia and Ukraine. Trump's policies may continue to support gold gains.
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