Gold Below $2,800 as strong USD limits gains,risk-off sentiment suppor

Gold remains under pressure as the US Dollar surges, reacting to President Trump’s new trade tariffs on Canada, Mexico, and China. However, global risk aversion and weaker US Treasury yields are helping to limit losses, keeping the XAU/USD uptrend intact. With traders now awaiting the US ISM Manufacturing PMI, gold’s next move will depend on incoming macroeconomic data and Fed rate expectations. Stronger USD Weighs on Gold, but Tariff Risks Provide Support The US Dollar extended gains, nearing a two-year high, after Trump confirmed a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods. The US Commerce Department’s PCE data showed inflation remained firm at 2.6% YoY, with consumer spending surging in December, reinforcing expectations that the Federal Reserve will delay rate cuts. Despite this, markets still price in two Fed rate cuts by the end of 2025, while falling Treasury yields offer some relief to gold. Additionally, concerns that Trump’s tariffs could further worsen inflation and disrupt global trade are increasing demand for safe-haven assets, preventing deeper declines in XAU/USD. Technical Outlook: Gold Consolidates but Maintains Uptrend From a technical perspective, $2,772 is emerging as a pivotal support. A break below this level could lead to further declines toward $2,755, with intermediate support at $2,740, followed by $2,725-$2,720. A decisive break below $2,700 would signal deeper downside risks. On the upside, gold faces immediate resistance at $2,790-$2,800, with the all-time high at $2,817. Daily chart oscillators remain positive and not yet overbought, suggesting that sustained buying momentum could drive prices higher, reinforcing the one-month-old uptrend. Market Outlook: Data-Driven Moves Ahead With Trump’s trade policy fueling economic uncertainty, gold remains well-supported by risk-off sentiment. The US ISM Manufacturing PMI and further inflation data will determine the next leg for XAU/USD, with any signs of economic weakness likely reinforcing gold’s bullish trend.