Gold price retreats from record high amid profit-taking
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Market Overview
Gold price (XAU/USD) pulls back from its all-time high, dropping to the $2,929 region during early European trading on Tuesday. The decline is primarily driven by profit-taking, but safe-haven demand remains strong due to global economic uncertainties.
Key Market Drivers
Trump’s Tariff Plans
US President Donald Trump reaffirmed tariffs on Canadian and Mexican imports, with more reciprocal tariffs on the way This has heightened fears of escalating trade tensions, supporting gold’s appeal as a safe-haven asset.
Federal Reserve Rate Cut Expectations
Despite the US Dollar bouncing from a two-month low, weak economic data reaffirms expectations of Fed rate cuts in 2025 Chicago Fed President Austan Goolsbee signaled a wait-and-see approach, but markets still price in two 0.25% rate reductions this year.
Gold ETF Inflows
The World Gold Council (WGC) reported the largest weekly inflow into gold ETFs since March 2022, reflecting continued investor demand.
Upcoming Market Events
Traders are closely watching the US Consumer Confidence Index and Richmond Manufacturing Index for short-term price direction. The main focus will be on Friday’s US PCE Price Index, which could influence the Fed’s rate-cut trajectory.
Technical Analysis & Support Levels
Gold remains in a bullish consolidation phase, but the Relative Strength Index (RSI) near 70 suggests overbought conditions.
Key support levels to watch:
$2,920-$2,915 – Lower end of the recent trading range, attracting buyers;
$2,900 & $2,880 – Additional strong support zones;
$2,860-$2,855 – Critical level, a break below could lead to further downside toward $2,834 and $2,800;
Despite the short-term dip, bullish momentum remains intact, with traders likely to buy the dip amid global uncertainties.
Gold price (XAU/USD) pulls back from its all-time high, dropping to the $2,929 region during early European trading on Tuesday. The decline is primarily driven by profit-taking, but safe-haven demand remains strong due to global economic uncertainties.
Key Market Drivers
Trump’s Tariff Plans
US President Donald Trump reaffirmed tariffs on Canadian and Mexican imports, with more reciprocal tariffs on the way This has heightened fears of escalating trade tensions, supporting gold’s appeal as a safe-haven asset.
Federal Reserve Rate Cut Expectations
Despite the US Dollar bouncing from a two-month low, weak economic data reaffirms expectations of Fed rate cuts in 2025 Chicago Fed President Austan Goolsbee signaled a wait-and-see approach, but markets still price in two 0.25% rate reductions this year.
Gold ETF Inflows
The World Gold Council (WGC) reported the largest weekly inflow into gold ETFs since March 2022, reflecting continued investor demand.
Upcoming Market Events
Traders are closely watching the US Consumer Confidence Index and Richmond Manufacturing Index for short-term price direction. The main focus will be on Friday’s US PCE Price Index, which could influence the Fed’s rate-cut trajectory.
Technical Analysis & Support Levels
Gold remains in a bullish consolidation phase, but the Relative Strength Index (RSI) near 70 suggests overbought conditions.
Key support levels to watch:
$2,920-$2,915 – Lower end of the recent trading range, attracting buyers;
$2,900 & $2,880 – Additional strong support zones;
$2,860-$2,855 – Critical level, a break below could lead to further downside toward $2,834 and $2,800;
Despite the short-term dip, bullish momentum remains intact, with traders likely to buy the dip amid global uncertainties.