Gold price stays under pressure amid trade war fears and USD recovery
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The Gold price begins the week on a weaker note, trading near $2,757 during Monday’s European session. A modest rebound in the US Dollar, following its recent decline, exerts downward pressure on the yellow metal. However, safe-haven demand and Federal Reserve rate cut expectations help limit deeper losses as trade war concerns resurface.
Market Sentiment Shifts on Renewed Tariff Concerns
Gold’s downside is partly attributed to US President Donald Trump’s surprise announcement of emergency tariffs on Colombian imports. The 25% tariffs, set to escalate to 50% if compliance isn't achieved, reignited trade war fears, dampening risk appetite. While Colombia has reportedly agreed to Trump's terms, the market remains cautious, especially with rumors of potential tariffs on Mexico and Canada looming.
Meanwhile, Trump’s calls for immediate interest rate cuts have fueled expectations that the Fed may lower borrowing costs twice this year. This outlook has led to a decline in US Treasury bond yields, which provides some support for the non-yielding Gold price.
Technical Analysis: Key Levels in Focus
Gold’s immediate support lies in the $2,750-2,748 zone, with further backing at $2,736. A decisive break below the $2,725-2,720 level could lead to additional selling pressure, pushing prices towards $2,665.
Conversely, a move beyond $2,773 could signal a recovery, opening the path to retest October’s all-time high of $2,790. A sustained rally above $2,800 would confirm a bullish breakout and potentially extend the positive momentum.
Outlook for the Session
Investors will closely monitor key US economic data, including Durable Goods Orders, Consumer Confidence, and the Richmond Manufacturing Index, for further clues on market direction. The interplay between safe-haven demand, USD movements, and Federal Reserve expectations will likely drive Gold’s near-term trajectory.
Market Sentiment Shifts on Renewed Tariff Concerns
Gold’s downside is partly attributed to US President Donald Trump’s surprise announcement of emergency tariffs on Colombian imports. The 25% tariffs, set to escalate to 50% if compliance isn't achieved, reignited trade war fears, dampening risk appetite. While Colombia has reportedly agreed to Trump's terms, the market remains cautious, especially with rumors of potential tariffs on Mexico and Canada looming.
Meanwhile, Trump’s calls for immediate interest rate cuts have fueled expectations that the Fed may lower borrowing costs twice this year. This outlook has led to a decline in US Treasury bond yields, which provides some support for the non-yielding Gold price.
Technical Analysis: Key Levels in Focus
Gold’s immediate support lies in the $2,750-2,748 zone, with further backing at $2,736. A decisive break below the $2,725-2,720 level could lead to additional selling pressure, pushing prices towards $2,665.
Conversely, a move beyond $2,773 could signal a recovery, opening the path to retest October’s all-time high of $2,790. A sustained rally above $2,800 would confirm a bullish breakout and potentially extend the positive momentum.
Outlook for the Session
Investors will closely monitor key US economic data, including Durable Goods Orders, Consumer Confidence, and the Richmond Manufacturing Index, for further clues on market direction. The interplay between safe-haven demand, USD movements, and Federal Reserve expectations will likely drive Gold’s near-term trajectory.