Gold News: Market Awaits Fed Signals as Prices Hold Strong Above $2,888

Gold Inches Higher as Dollar Weakens, Trade War Fears Linger

Gold prices are pushing higher on Monday in low-volume trading, as U.S. markets remain closed for the President’s Day holiday. The metal is trading inside Friday’s range, reflecting investor indecision while signaling potential for heightened volatility ahead.

The rally that began on December 18 at $2,583.91 remains intact, with the next resistance at $2,942.78. A break above this level would signal a continuation of the uptrend, with no clear resistance levels in sight.

On the downside, support is seen at $2,888.52, with stronger buying interest expected around $2,857.49 and $2,836.67. A move below $2,864.33 could shift short-term momentum downward, but a sustained sell-off appears unlikely given the underlying market support.

At 11:52 GMT, XAU/USD is trading $2900.39, up $17.91 or +0.62%.

Gold Benefits from Dollar Weakness and Tariff Uncertainty

A weaker U.S. dollar is providing a tailwind for gold, making the metal more attractive to international buyers. The dollar index remains under pressure, struggling to recover after last week’s 1.2% decline, driven by weaker-than-expected U.S. retail sales data.

Adding to market uncertainty, former President Donald Trump has renewed tariff threats, stating that auto levies could take effect as early as April 2. Concerns over potential retaliatory measures and escalating trade tensions have boosted safe-haven demand for gold. UBS analyst Giovanni Staunovo reaffirmed a bullish outlook, projecting prices to reach $3,000, supported by ongoing central bank demand.

Geopolitical Developments Could Influence Gold’s Momentum

Markets are closely watching U.S.-Russia negotiations as reports suggest Saudi Arabia may host peace talks regarding the Ukraine conflict. Progress in these discussions could cap some of gold’s gains, though underlying geopolitical risks remain a key driver for the metal. Exinity Group analyst Han Tan noted that while peace talks could slow gold’s rally, ample support remains to keep prices elevated.

Meanwhile, U.S. Federal Reserve officials are set to speak later in the day, with traders awaiting any insights on the future path of interest rates. The recent downturn in U.S. economic data has reignited expectations for potential Fed rate cuts, which would further support non-yielding assets like gold.

Market Forecast: Bullish Momentum Holds, But Resistance Looms

Gold’s technical outlook today remains bullish as long as prices hold above key support at $2,888.52. A break above $2,942.78 could trigger further upside, potentially paving the way toward $3,000. However, traders should monitor the dollar’s movement and geopolitical developments, as any resolution in global tensions or unexpected hawkish signals from the Fed could temper gold’s gains.

For now, the combination of a softer dollar, trade war concerns, and central bank demand keeps gold’s bullish momentum intact.

More Information in our Economic Calendar.