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14/02/25
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Gold Prices Rise Amid Trade War Fears and U.S. Economic Data Anticipation
Gold prices are experiencing a slight increase during Friday’s Asian trading session, driven by growing concerns surrounding the potential for a global trade war and a decline in U.S. bond yields. Investors are preparing for the release of U.S. retail sales data for January, which is also expected to influence market sentiment.
The uptick in gold prices comes amidst worries over tariff plans proposed by the U.S. administration. Specifically, a roadmap for imposing reciprocal tariffs on countries that levy duties on U.S. imports has raised apprehensions among investors. Although these tariffs will not be implemented until April 1, the anticipation of potential trade disruptions is bolstering demand for gold as a safe haven asset.
In addition to trade fears, the recent data on U.S. Producer Prices indicates inflationary pressures, which may affect future monetary policy decisions by the Federal Reserve. The Producer Price Index (PPI) increased by 3.5% year-on-year, surpassing expectations. Meanwhile, initial jobless claims fell to 213,000, below market forecasts. Despite these signs of a robust economy, there are concerns that the Fed will maintain its hawkish stance on interest rates, which could dampen demand for non-yielding assets like gold.
Technically, gold is maintaining a strong bullish trajectory, holding above the key 100-day Exponential Moving Average. However, the Relative Strength Index (RSI) indicates that the metal may be overbought, suggesting caution for traders considering further positions. The immediate resistance level for gold is seen between $2,942 and $2,943, with potential for gains to reach $2,955. Conversely, vital support levels to monitor include $2,864 and $2,744, with the psychological level at $2,680 to $2,685 serving as a critical threshold for the price action.
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