Gold Advances to $2,750 Amid Trade Uncertainty and Rate Bets by Amit Gupta, Kedia Advisory
Gold price continues its upward momentum, climbing to $2,750, its highest level since November 1. Safe-haven flows, driven by global trade uncertainties and US tariff threats, fuel the rise. Additionally, declining US Treasury yields, amid expectations of Federal Reserve rate cuts, support the precious metal. However, a modest recovery in the US Dollar and the prospect of a Bank of Japan rate hike could cap gains. From a technical perspective, the breakout above the $2,720 zone signals bullish sentiment, with potential to test the $2,790 peak. Investors now focus on upcoming global economic data and central bank decisions to gauge the next move in Gold prices.
Key Highlights
* Gold surges to $2,750, highest since November 1.
* Safe-haven demand rises amid US tariff threats and global uncertainties.
* US Treasury yield decline supports Gold, driven by Fed rate cut bets.
* Modest USD recovery and BoJ rate hike speculation limit gains.
* Technical breakout above $2,720 signals further upside potential.
Gold prices extended their rally for the third consecutive day, reaching $2,750 during Wednesday's Asian session, marking the highest level since November 1. This climb is underpinned by robust safe-haven demand, as US President Donald Trump’s tariff threats on Canada and Mexico stoke fears of a renewed global trade war. The uncertainty surrounding these policies has intensified market volatility, boosting interest in the yellow metal.
The decline in US Treasury bond yields, fueled by expectations of two Federal Reserve rate cuts this year, further supports Gold. Investors anticipate that the Fed will maintain an accommodative stance amid easing US inflation, providing additional tailwinds to non-yielding assets like Gold. However, a modest recovery in the US Dollar from recent lows and speculation around a potential rate hike by the Bank of Japan could limit upside momentum.
Technically, Gold's decisive move past the $2,720 resistance zone has bolstered bullish sentiment. Indicators suggest that the price could challenge the October 2024 high of $2,790 if it sustains above the $2,750 hurdle. Any pullbacks are expected to find strong support near $2,720-$2,725, with a significant floor at $2,700-$2,690.
Looking ahead, the market's focus shifts to the Bank of Japan's monetary policy decision and global PMI data, which could inject further volatility into Gold prices. Meanwhile, geopolitical developments, including the Israel-Hamas ceasefire and discussions on Russia-Ukraine sanctions, remain key drivers influencing investor sentiment.
Conclusion
Gold's bullish momentum is set to challenge $2,790, with strong support at $2,720-$2,725. Watch for central bank decisions and global trade news for further cues.
