Key Points:
- Gold rebounded to $2,870.22 after dipping to $2,832.68, marking a recovery from three-week lows.
- Weaker U.S. dollar and geopolitical concerns continue to support gold’s safe-haven appeal.
Gold Rebounds After Recent Drop, Supported by Weaker Dollar
Gold prices recovered on Monday after touching a three-week low in the previous session, with spot gold rising 0.3% to $2,870.22 per ounce. U.S. gold futures gained 1% to $2,878.90, as traders turned to safe-haven assets amid geopolitical and economic uncertainty.
Earlier in the session, gold had dropped to $2,832.68, reflecting broader market concerns over U.S. President Donald Trump’s escalating tariff policies. However, the U.S. dollar index (USDX) eased 0.4%, helping gold regain strength. A weaker dollar makes gold more attractive for non-dollar holders, contributing to the rebound.
Market Focus Shifts to Tariffs and Federal Reserve Policy
Traders remain cautious ahead of the scheduled 10% tariff increase on China, set to take effect on Tuesday. The move adds to existing 20% cumulative tariffs, raising fears of inflationary pressures and economic slowdown.
While gold is often seen as a hedge against geopolitical risks, rising interest rates can dampen its appeal. Last week, U.S. inflation data suggested a cautious stance from the Federal Reserve, reducing the likelihood of immediate rate cuts. Traders now await the U.S. payrolls report due later this week for further guidance on Fed policy.
Bulls Eye Resistance at $2,880
Gold is currently trading within a tight range, with key support at $2,832.68, marking the recent low, and resistance at $2,876.85, the intraday high, followed by a stronger barrier at $2,880. A breakout above these levels could indicate further upside potential.
Picture: Gold eyes $2880 breakout as bullish momentum builds, as seen on the VT Markets app
The MACD indicator is showing signs of a possible bullish crossover, suggesting that buying momentum may strengthen if gold manages to surpass the $2,880 resistance. Traders will be watching closely for confirmation of this trend, as a successful breakout could pave the way for further gains.
Gold traders will be closely watching any further dollar weakness and the Fed’s next steps on rate policy to gauge the next directional move.
