Gold Struggles Below $2,900 Amid Fed's Hawkish Stance, Trade Worries by Amit Gupta , Kedia Advisory
Gold prices remain under pressure below $2,900 as traders await the US CPI report for fresh cues on the Fed's rate path. The metal has declined for two consecutive sessions, influenced by a stronger US Dollar after hawkish remarks from Fed Chair Jerome Powell. Trade war concerns, fueled by US President Donald Trump's new tariffs on steel, aluminum, and potential broader levies, support safe-haven demand for gold. However, technical indicators suggest limited downside, with key support at $2,855-2,852. The CPI data, expected to show a slight cooling in inflation, will be crucial for gold’s next move, with resistance at $2,910 and further upside potential towards $2,942-2,943.
Key Highlights
* Gold trades below $2,900 for the second straight session as traders eye the US CPI data.
* Fed Chair Powell’s hawkish remarks boost the US Dollar, weighing on gold prices.
* US trade war concerns rise after Trump imposes new tariffs on steel and aluminum.
* Technical support seen near $2,855-2,852, limiting further downside for XAU/USD.
* CPI report will be crucial in determining the Fed’s rate policy and gold’s direction.
Gold prices continue to face selling pressure below $2,900, marking the second consecutive day of decline. The downtrend is driven by a stronger US Dollar, supported by Fed Chair Jerome Powell’s hawkish stance. Powell reaffirmed the Fed’s commitment to keeping rates steady amid easing inflation but emphasized that it remains above the 2% target. The dollar’s strength has dampened gold’s upward momentum, keeping prices in check.
Despite this, concerns over escalating trade tensions provide underlying support to gold. President Donald Trump has imposed 25% tariffs on steel and aluminum imports and signaled potential levies on automobiles, pharmaceuticals, and tech components. These trade policies have raised fears of a global trade war, prompting investors to hedge against uncertainties through gold.
From a technical standpoint, the RSI on the daily chart suggests some profit-taking, yet the downside appears limited. Key support is placed at $2,855-2,852, while further declines could push prices toward $2,834 and $2,800. On the upside, a move above $2,910 could trigger fresh buying, driving prices towards $2,942-2,943, the recent all-time high.
Investors are now focused on the US CPI data release, which is expected to show a 2.9% YoY rise in headline inflation and a core CPI of 3.1% YoY, slightly lower than the previous month’s 3.2%. The report will be instrumental in shaping market expectations for the Fed’s monetary policy and, consequently, gold’s near-term trajectory.
Finally
Gold remains under pressure but finds support from trade war concerns. A break above $2,910 could push prices higher, while downside support remains firm at $2,855. The upcoming US CPI data will be key in determining gold’s next move.
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