Gold Prices Dip Amid USD Recovery, Limited Downside Expected by Amit Gupta, Kedia Advisory
Gold prices started the week on a weaker note, pressured by a recovering US Dollar (USD) and trade war concerns. Despite the retracement from recent highs, expectations of Federal Reserve interest rate cuts and declining US Treasury bond yields could limit further downside. Additionally, safe-haven demand stemming from renewed trade tensions may support the yellow metal near key levels. Traders now focus on upcoming US economic data for fresh direction, while the $2,736 support level is seen as pivotal for price action.
Key Highlights
* Gold prices dip 0.65%, trading near $2,750 amid USD recovery.
* Renewed US trade war fears temper risk appetite globally.
* Fed rate cut expectations cap significant USD appreciation.
* Key support at $2,736 limits further downside risks for gold.
* US economic data will be critical for short-term price moves.
Gold prices started the week on a bearish note, sliding 0.65% to trade near $2,750. This pullback follows a sharp rise to $2,786 last week, the highest since October, driven by a recovery in the US Dollar (USD). The USD rebounded by 0.25% from a one-month low amid escalating trade tensions and new tariff policies from US President Donald Trump. This weighed on gold, traditionally inversely correlated with the Greenback.
However, expectations of Federal Reserve rate cuts and falling US Treasury bond yields have tempered USD strength. Trump's decision to impose emergency tariffs on Colombian imports revived trade war fears, increasing demand for safe-haven assets like gold. Additionally, reports of possible tariffs on Mexico and Canada have further dampened investor sentiment, which may limit gold's downside potential.
From a technical perspective, gold’s immediate support lies in the $2,736 area, critical to maintaining bullish momentum. A sustained break below could trigger further losses toward $2,700 and $2,665. On the upside, a recovery above $2,772 could pave the way for a retest of the $2,790 peak, with $2,800 as the next psychological barrier.
Traders now await key US economic indicators, including Durable Goods Orders and Consumer Confidence Index, to assess gold’s short-term trajectory. These factors, alongside ongoing geopolitical developments, will likely guide the metal's next major move.
Finally
Gold prices remain under pressure near $2,750, with key support at $2,736 limiting losses. Watch for economic data and trade updates to shape future trends.
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