Gold prices climbed for the second straight day, supported by a weaker US dollar and anxieties over potential trade conflicts. Though reduced rate cut expectations introduce some caution, gold's safe-haven appeal remains strong.
Gold prices continued their upward climb for the second consecutive day on Thursday, fueled by a confluence of supportive factors. Concerns surrounding President Trump's proposed tariffs and a modest weakening of the US dollar propped up the XAU/ USD pair. However, reduced expectations for a Fed eral Reserve rate cut introduced a note of caution, urging traders to exercise prudence before positioning for further gains.The rally in gold prices stemmed from a combination of factors.
A decline in US Treasury bond yields exerted downward pressure on the US dollar, benefiting the dollar-denominated commodity. Additionally, anxieties about US President Donald Trump's tariffs and the potential for a global trade war bolstered gold's status as a safe-haven asset. While the hotter-than-expected US consumer inflation figures released on Wednesday initially sparked a sell-off in gold, the market's reaction proved short-lived. The data reinforced expectations that the Federal Reserve would maintain its hawkish stance and keep interest rates steady for an extended period. This could potentially act as a headwind for gold prices, which are currently considered overbought. Traders are now awaiting the release of the US Producer Price Index (PPI) for further direction.From a technical standpoint, the daily Relative Strength Index (RSI) remains in overbought territory, suggesting a need for caution before expecting further price surges. Bulls may opt for a brief consolidation near the $2,942-2,943 level, which represents the all-time peak reached on Tuesday. This level now acts as a key resistance point for gold prices. Conversely, a decline below the $2,900 psychological level could trigger a corrective pullback, potentially reaching the overnight swing low around $2,864.Sustained selling pressure could accelerate this corrective move, pushing gold prices towards intermediate support near the $2,834-2,832 region before potentially testing the $2,800 mark. The upcoming US economic data, including the PPI and Weekly Initial Jobless Claims, will be closely watched for any implications on the US dollar and potential impacts on the XAU/USD pair
GOLD PRICES USD TRADE WAR FED INTEREST RATES INFLATION
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