Live XAU/USD Chart

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Gold prices have reached an 11-week high, driven by increased safe-haven demand as uncertainty looms over U.S. trade policies and a weakening dollar.

Spot gold inched up 0.1% to $2,748.18 per ounce as of 0236 GMT, touching its highest level since November 5, 2024. Meanwhile, U.S. gold futures also climbed 0.1% to $2,762.90.

 

Trade Policy Concerns Fuel Gold’s Rally

Market analysts attribute gold’s bullish tone to ongoing uncertainty regarding U.S. trade policies under President Donald Trump. According to Kelvin Wong, senior market analyst at OANDA for the Asia-Pacific region, uncertainty surrounding the timing of trade policy implementation is influencing the dollar’s direction, which in turn is propelling gold prices higher.

President Trump recently refrained from imposing immediate trade barriers, causing a dip in the dollar. A weaker dollar typically boosts gold’s appeal among foreign investors, as it becomes more affordable in other currencies. Additionally, gold’s reputation as a safe-haven asset continues to attract investors amid geopolitical and economic uncertainties.

Fed Policy and Inflationary Pressures

Trump’s administration has proposed a 10% tariff on goods imported from China, effective February 1. While this move could fuel inflationary pressures, it also introduces concerns that the Federal Reserve may maintain higher interest rates for a longer period. Higher interest rates reduce the attractiveness of non-yielding assets like gold.

The Federal Reserve, which meets on January 28-29, is expected to keep its benchmark interest rate steady at 4.25%-4.50%, following a full percentage point reduction since September 2024. Despite progress in controlling inflation and sustained economic growth, the Fed remains cautious about potential trade-related disruptions.

Technical Outlook: Gold’s Key Levels to Watch

Gold continues to exhibit bullish momentum, with current trading at $2,749.54, reflecting a 0.05% increase. The technical analysis suggests key levels traders should monitor:

• Resistance Levels:

  • $2,754.99 (Immediate resistance)

  • $2,769.45 (Next resistance)

  • $2,787.83 (Higher resistance)

• Support Levels:

  • $2,717.24 (Immediate support)

  • $2,693.95 (Next support)

  • $2,677.23 (Lower support)

Gold remains above the pivot point at $2,732.92, reinforcing the positive market sentiment. The 50-day Exponential Moving Average (EMA) at $2,715.06 serves as a crucial dynamic support, keeping the short-term bullish trend intact. A decisive breakout above $2,754.99 could pave the way for further upside, while a drop below $2,717.24 might trigger selling pressure.

Conclusion

Gold prices remain in a strong uptrend, with investors closely watching upcoming developments in U.S. trade policies and Federal Reserve decisions. The market’s bullish momentum is supported by a weaker dollar and ongoing economic uncertainties. A sustained move above $2,754.99 could signal further gains, while a decline below key support levels may prompt a correction.

Key Takeaways:

• Gold trading above $2,732.92 signals continued bullish sentiment.

• Resistance at $2,754.99 is a crucial breakout level.

• Support at $2,717.24 aligns with the 50-day EMA, offering a key downside level.