26/02/25

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Gold prices are experiencing an upward trend in the early Asian trading session on Wednesday. Investor concerns surrounding trade disputes have sparked increased safe-haven investments, thereby supporting the gold market. As traders prepare for the upcoming US New Home Sales report and comments from Federal Reserve officials later in the day, gold’s appeal as a stable asset rises.

After hitting a one-week low in the previous session, gold (XAU/USD) has begun to recover its losses. The uncertainty surrounding US tariff policies under President Trump continues to cast a shadow over the market, thereby maintaining interest in gold. However, analysts suggest that the potential for increased tariffs could lead to inflation concerns for the Federal Reserve, prompting the central bank to maintain higher interest rates for an extended period. Such a scenario could limit gold’s price appreciation since rising interest rates typically diminish the attractiveness of non-yielding assets like gold.

The focus will also be on the January New Home Sales data, while speeches from Fed officials are anticipated to provide further insights into monetary policy direction. Additionally, the upcoming release of the US Personal Consumption Expenditures Price Index is generating significant interest among market participants.

The gold market is exhibiting resilience amid ongoing trade tensions. A recent Executive Order from President Trump initiated a formal investigation into copper markets, emphasizing his commitment to tariff policies, including those affecting Canadian and Mexican imports. The drop in consumer confidence to its lowest level since August 2021 has also added to market volatility. Fed officials are adopting a cautious stance regarding interest rate strategies until inflation is demonstrated to be heading back toward the target of 2%.

Despite some short-term consolidation, the bullish sentiment for gold remains intact. The metal is currently trading within a narrow range but continues to hold above the crucial 100-day Exponential Moving Average. The Relative Strength Index suggests that upward movement is more likely than declines. The all-time high of $2,957 presents a significant barrier for buyers, with a potential breakout opening the door to higher targets near $2,980 and possibly the $3,000 milestone. Conversely, a drop below recent lows may see key support levels at $2,888 and $2,795, with $2,718 representing critical support linked to the 100-day EMA.