Gold Price Forecast: XAU/USD eyes a daily closing above key 61.8% Fibo resistance

Gold stands tall above $5,150 amid trade, economic and geopolitical concerns linger.
The US Dollar licks wounds as ‘Sell America’ theme resurfaces on Trump’s tariff woes.
Gold cracks the critical 61.8% Fibo resistance at $5,142, awaits a daily closing above it.

Dhwani Mehta FXStreet

Gold is adding over 1% early Monday, after having gained 2% on Friday. The bright metal scales key technical hurdles, as buyers stay strong amid renewed tariffs and economic uncertainty alongside looming US-Iran geopolitical tensions.

Gold eyes more upside on tariff jitters

Gold kicks off the week with a bang as US President Donald Trump’s tariff announcements spark confusion and dent investors’ confidence, fuelling a flight to safety and ‘sell America’ theme once again across the financial markets.

The US Supreme Court on Friday rejected Trump’s emergency tariffs, prompting the President to announce a new 10% rate on the rest of the world, only to then lift it to 15%. The move rekindled market concerns over a highly uncertain and volatile environment, acting as a headwind for the US assets, including the US Dollar (USD).

The US Treasuries were also negatively hit as Trump’s latest tariffs raised the possibility of the US government having to repay around $170 billion in revenue.

Additionally, markets also preferred to flock to the traditional store of value, Gold, amid unimpressive US economic data and nervousness ahead of the Artificial Intelligence (AI) pioneer Nvidia’s earnings report this week.

Data showed US economic growth slowed sharply to a 1.4% annualized rate in the fourth quarter (Q4), well under the market forecast of 3%, while the Fed's preferred inflation gauge, the core Personal Consumption Expenditure (PCE) Price index, rose 3% annually in December, above expectations for a 2.9% increase.

Traders still expect at least 50 basis points (bps) of interest rate cuts by the Fed this year, with the first expected in June. Gold thrives on lower rates.

In the week ahead, Gold will continue to rejoice haven demand, with Chinese traders returning from a week-long holiday on Tuesday and reacting to Trump’s tariff news. Meanwhile, geopolitical risks also remain on the rise ahead of the second round of talks between the United States (US) and Iran in Geneva on Thursday.

Nvidia earnings on Wednesday and the US Producer Price Index (PPI) data will ramp up the market volatility later this week as tariff headlines remain the central focus.

Gold price technical analysis: Daily chart

The 21-day Simple Moving Average (SMA) rises above the 50-, 100- and 200-day SMAs, reflecting firm bullish momentum as all gauges trend higher while price holds above them. The 21-day SMA stands at $5,020.15 and offers nearby dynamic support. The Relative Strength Index (14) sits at 59.76 and is edging higher, reinforcing improving upside momentum without reaching overbought.

Measured from the $5,597.89 high to the $4,401.99 low, the Fibonacci retracement (Fibo) framework shows the 78.6% retracement at $5,341.96 capping the upside. The 61.8% retracement at $5,141.05 has been cleared, and a daily close over that barrier would open room toward the 78.6% Fibo resistance. On pullbacks, the 50-day SMA at $4,723.32 offers a deeper support area.

(The technical analysis of this story was written with the help of an AI tool.)

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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