- Gold price extends rebound toward $2,750, retests one-month top.
- Trump’s tariff threats-led risk aversion lifts the US Dollar weakens, Treasuries and Gold price.
- Risks remain skewed to the upside for Gold price amid a bullish daily technical setup.
Gold price builds on its rebound to retest monthly highs of $2,725 early Tuesday. Gold buyers are back in action alongside US President Donald Trump’s tariff threats, fuelling risk-off sentiment across the financial markets.
Gold price risks volatile trading
Trump said: “We’re thinking in terms of 25% on Mexico and Canada,” effective February 1. He added that his administration “will straighten out the deficit with EU with tariffs or by them buying our oil and gas,” threatening tariffs on the old continent anytime soon.
Trump also noted that he is prepared to impose tariffs on China if Beijing doesnt approve the TikTok deal. Investors scurried for safety in the traditional safe-haven Gold price, propping up the rates close to monthly highs of $2,725.
The flight to safety theme remains supportive of Gold price and US government bonds, which weigh negatively on the US Treasury bond yields. Trump tariff threats could revive inflation concerns worldwide, providing extra support to Gold price. The bullion is considered a hedge against inflation.
However, further upside appears elusive for Gold buyers as the US Dollar (USD) has also gains on safe-haven demand, capping the USD-denominated bright metal. Additionally, expectations that the US Federal Reserve (Fed) would deliver two interest rate cuts this year after the tame December inflation data, act as a tailwind to Gold price but that could change if inflation concerns sag investors’ sentiment.
On Monday, Gold price witnessed good two-way businesses, initially extending Friday’s correction on easing Middle East tensions and profit-taking heading into Trump’s inauguration. However, during Trump’s inaugural address, the USD dipped to a nine-day low, helping Gold price stage a decent rebound above $2,700.
A 15-month-long relentless war between Israel and Hamas culminated in a ceasefire on Sunday as hundreds of trucks carrying aid entered Gaza on the first day.
In the day ahead, Gold trades will remain at the mercy of the broader market sentiment and Trump’s tariff talks, in the absence of any top-tier US economic data releases.
Gold price technical analysis: Daily chart
The short-term technical outlook remains constructive for Gold price.
This month’s symmetrical triangle breakout remains in play, while the yellow metal holds well above all the major daily simple moving averages (SMA), supporting the bullish case.
The 14-day Relative Strength Index (RSI) points north above the midline, currently near 63, adding credence to the bullish potential.
Gold price eyes acceptance above the key static resistance at $2,726 to extend the uptrend toward the $2,750 psychological barrier. The next target is aligned at the record high of $2,790.
On the downside, Gold price could test the $2,700 round level, below which the January 15 low of $2,670 will be threatened.
The 21-day SMA at $2,658 could next be on the sellers’ radars.
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