Gold prices (XAU/USD) continue to build on the gains from the previous session, extending their upward momentum for the second consecutive day on Tuesday. The price of gold has risen to its highest point since November 6, reaching around $2,729, bolstered by U.S. President Donald Trump’s tariff remarks, which have increased demand for traditional safe-haven assets. Additionally, a decline in U.S. Treasury bond yields, fueled by expectations of two interest rate cuts by the Federal Reserve this year, has further supported gold’s price.
Trump’s protectionist policies, which could reignite inflationary pressures, are also seen as a factor that may compel the Fed to maintain a hawkish stance, lending additional support to the U.S. dollar (USD). This modest rebound in the dollar, alongside an overall positive tone in equity markets, has capped gold’s further gains. However, the broader market outlook continues to favor bullish traders, with the fundamentals pointing to an ongoing upward trajectory for XAU/USD.
From a technical standpoint, gold has found solid footing above the $2,720 supply zone. Oscillators on the daily chart show positive momentum, though they remain well away from overbought territory, indicating that further price appreciation remains possible. As a result, a continued move higher towards the $2,735 resistance zone, and potentially the $2,746-2,748 region, appears likely. The uptrend could extend further, with gold potentially testing the all-time high of $2,790 set in October 2024.
On the downside, any corrective pullback in gold is expected to find support near the $2,700 mark. A drop below the recent swing low of $2,689 could trigger technical selling, pushing the price further towards the $2,662-2,660 range. This support zone is critical, as a breach below it may lead to a decline towards $2,635, with further downside risks toward the $2,622-2,618 confluence, which consists of a short-term ascending trendline from the November low and the 100-day Exponential Moving Average (EMA).
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