Gold News: Safe-Haven Demand Pushes Prices Higher Amid Trade Uncertainty

Gold Prices Hit 2-Month High as Dollar Weakens

Gold prices advanced on Tuesday, reaching $2,733.06, their highest level since November 24, before trimming some gains later in the session. The rally saw gold surpass the December 12 peak of $2,726.30, which acted as a key resistance level. The breakout signals strong momentum, with room for prices to climb toward the all-time high of $2,790.17, last reached on October 31.

Traders are eyeing immediate support at $2,693.40, with further downside levels at $2,663.50, a significant 50% retracement level, and $2,645.78, which coincides with the 50-day moving average. Any pullback into these zones could provide buying opportunities.

At 12:04 GMT, XAU/USD is trading $2723.29, up $15.39 or +0.57%.

Weaker Dollar Fuels Gold’s Strength

The U.S. dollar index fell 0.6% on Tuesday, trading near a two-week low. A weaker dollar made gold more attractive to foreign investors, as bullion becomes cheaper for holders of other currencies.

Later in the day, the dollar regained some ground as President Donald Trump floated the possibility of a 25% tariff on imports from Mexico and Canada. While this prompted a temporary rebound in the greenback, gold’s safe-haven appeal remained intact, supported by lingering concerns over trade policy uncertainty.

Safe-Haven Demand Drives Gold Higher

Gold’s role as a hedge against economic and geopolitical uncertainty has been a driving factor in its recent performance. Trump’s comments about potential tariffs on Canada, Mexico, and China heightened fears of global trade disruptions, prompting investors to shift capital into safe-haven assets like gold.

In addition, U.S. Treasury yields declined on Tuesday as markets absorbed the economic implications of Trump’s policy announcements. Investors showed risk-off sentiment following his signing of more than 40 executive orders, which has added to uncertainty surrounding his administration’s economic agenda.

Market Forecast for Gold Prices

Gold’s upward momentum and the breakout above $2,726.30 suggest a bullish outlook for the near term. If prices continue to rise, the market could test the all-time high of $2,790.17. However, resistance could emerge if the U.S. dollar strengthens further or if markets anticipate prolonged high interest rates from the Federal Reserve.

Traders should closely monitor upcoming U.S. economic data, including housing statistics and PMI releases, as well as any developments in Trump’s trade policies, which could provide additional catalysts for gold prices.

More Information in our Economic Calendar.