Gold Prices Hold Firm as Trump's Tariff Plans Boost Safe-Haven Demand by Amit Gupta , Kedia Advisory
Gold prices rebounded above $2,900 on renewed trade war fears after reports suggested that former U.S. President Donald Trump’s proposed reciprocal tariffs could be imposed soon. Despite hotter-than-expected U.S. CPI data and hawkish remarks from Federal Reserve Chair Jerome Powell, the U.S. Dollar remained subdued, allowing Gold to recover from intraday losses. Investors continued to buy the dip, supporting the metal amid growing uncertainty. Traders now turn their focus to the U.S. Producer Price Index (PPI) data for further cues on the Fed’s policy path. Technical indicators suggest that Gold needs to sustain above key levels for continued bullish momentum, with $2,910 as the next resistance.
Key Highlights
* Gold prices regain strength above $2,900 amid Trump’s tariff concerns.
* Hot U.S. CPI data fails to lift the Dollar, supporting Gold.
* Fed’s hawkish stance sparks bond yield surge, limiting Gold’s upside.
• Technical support at $2,897 prevents further downside in Gold.
* U.S. PPI data will be crucial in shaping Gold’s next move.
Gold prices saw intense volatility but managed to reclaim the $2,900 mark after a sharp drop to $2,865 on Wednesday. The uncertainty over potential reciprocal tariffs from Donald Trump fueled safe-haven demand, lifting Gold prices. However, the Federal Reserve’s hawkish stance limited the gains, as U.S. bond yields surged following higher-than-expected January CPI data.
The latest inflation figures showed annual headline CPI rising to 3% in January, with core inflation at 3.3%, reinforcing expectations that the Fed may delay rate cuts. Fed Chair Jerome Powell stated that the central bank is not in a hurry to lower rates, dampening the outlook for non-yielding assets like Gold. Despite this, Gold buyers stepped in at lower levels, helping prices rebound strongly.
From a technical perspective, Gold found support near the 21-four hourly SMA at $2,897, preventing further downside. The RSI indicator remains above 63, signaling continued upside momentum. If Gold clears the $2,910 resistance on a four-hourly closing basis, it could aim for $2,943, the recent record high. However, failure to hold above $2,897 may push Gold towards $2,866 and $2,816.
Looking ahead, market participants will closely watch the U.S. PPI data for further inflation insights. A stronger reading could reignite Fed rate hike concerns, weighing on Gold, while weaker data may fuel further gains. Trump’s tariff policies will also play a crucial role in shaping Gold’s short-term direction.
Finally
Gold prices remain supported above $2,900 as trade war fears drive safe-haven demand. A break above $2,910 could trigger further upside, while key support remains at $2,897.
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