Key Points
- Gold trades above $2,930 per ounce, near all-time highs.
- FOMC minutes stress need for more disinflation evidence, delaying rate cut expectations.
- Trump’s 25% auto tariff plan and US-Russia talks add to market uncertainty.
Gold remained above $2,930 per ounce on Thursday, hovering near historic highs as investors assessed the latest Federal Open Market Committee (FOMC) minutes and escalating global risks.
The Fed’s January meeting minutes signaled that policymakers require more evidence of sustained disinflation before considering rate cuts. Additionally, the Fed highlighted concerns that rising tariffs could fuel inflationary pressures, complicating monetary policy decisions. Markets are currently pricing in one rate cut for 2025, with a second cut still uncertain.
Safe-Haven Demand Rises on Geopolitical Tensions
Gold’s safety appeal remains strong, as uncertainty over trade policy and geopolitical risks continues to support demand. Donald Trump’s proposal of a 25% tariff on automobiles, semiconductors, and pharmaceuticals has reignited fears of a trade war, driving investors toward defensive assets.
Additionally, US-Russia peace talks on the Ukraine war are under scrutiny. The exclusion of Kyiv from negotiations has raised concerns over delays in conflict resolution, adding to global instability.
Technical Analysis
Picture: XAUUSD holds above $2,940, eyeing resistance at $2,946.88 amid cautious sentiment, as seen on the VT Markets app.
XAUUSD rose 0.20%, closing at $2,941.25 after opening at $2,935.36. The session saw a high of $2,942.37 and a low of $2,933.29, with price action showing resilience after an earlier dip to $2,907.16. A breakout attempt to $2,946.88 was met with resistance, leading to a pullback before stabilising.
The moving averages (MA 5,10,30) signal mixed momentum, with shorter-term MAs hovering near price levels, indicating consolidation. The MACD (12,26,9) remains slightly bullish, with the histogram narrowing, suggesting slowing momentum.
Key support stands at $2,907.16, while resistance is observed at $2,946.88. A breakout above resistance could reinforce bullish sentiment, while failure to hold current levels may invite fresh selling pressure.
Market Outlook for the Yellow Metal
Gold’s bullish trend remains intact, driven by delayed Fed rate cuts, geopolitical factors like the US-Russia peace talks and trade tensions.
If inflation concerns persist or the US-China trade conflict escalates, gold could extend its rally beyond $2,950 per ounce. However, any hawkish Fed surprises or positive trade resolutions could lead to short-term corrections.
