Gold Prices Near Record High: Will $3,000 Be the Next Target?
Gold (XAU/USD) remains resilient, trading at $2,940 as inflation concerns and global trade uncertainties support bullish momentum.
U.S. President Donald Trump’s aggressive tariff policies have ignited fears of escalating inflation and a potential global trade war.
Since his inauguration, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum. Recently, he announced plans to extend tariffs to lumber, automobiles, semiconductors, and pharmaceuticals, signaling no relief for international trade tensions.
“Uncertain outlooks for both global trade and inflation are proving conducive for gold, bringing the $3,000 level within range,” stated Tim Waterer, Chief Market Analyst at KCM Trade. This bullish sentiment is fueled by Trump’s economic policies and the Federal Reserve’s cautious stance on interest rates.
Fed’s Policy Uncertainty Boosts Gold’s Safe-Haven Appeal
Minutes from the Federal Reserve’s latest policy meeting reveal concerns about Trump’s tariffs driving inflation, reinforcing the decision to maintain a pause on rate cuts. The market currently expects the Fed to cut rates by 38 basis points by December, according to LSEG data. However, any shift in Fed policy could significantly impact gold prices.
Gold is traditionally viewed as a hedge against geopolitical risks and inflation. However, rising interest rates can reduce its appeal as a non-yielding asset. With several Federal Reserve officials scheduled to speak later today, investors are closely watching for signals that may influence the U.S. central bank’s monetary policy.
Key Insights:
Fed’s pause on rate cuts boosts gold’s safe-haven demand.
Market anticipates a 38 basis point cut by December.
Higher interest rates could limit gold’s bullish momentum.
Technical Outlook: Gold Eyes $2,947 Resistance
Gold (XAU/USD) is trading at $2,940, consolidating just below the key resistance level of $2,947. The metal maintains its bullish trend, underpinned by an ascending trendline and the 50-day Exponential Moving Average (EMA) at $2,920, serving as dynamic support.
A breakout above $2,947 could trigger a rally toward $2,968 and $2,990, edging closer to the psychological $3,000 mark. Conversely, failure to break above this resistance level may lead to short-term consolidation or a pullback. On the downside, initial support is seen at $2,920, with further safety nets at $2,900. A break below these levels could shift sentiment to bearish, attracting sellers.
Technical Levels to Watch:
Resistance: $2,947, $2,968, $2,990
Support: $2,920, $2,900
Gold Outlook and Strategy
Gold remains bullish above $2,920, with momentum likely to continue if inflation fears and geopolitical tensions persist. However, traders should be cautious of potential pullbacks if the Federal Reserve signals a change in interest rate policy. Investors are advised to monitor key levels and wait for a decisive move above $2,947 for confirmation of a bullish breakout.
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