Gold (XAU/USD) continues to trade with a positive bias, hovering close to the record high reached on the previous day. The catalyst behind the rally is US President Donald Trump’s renewed threat to impose tariffs on imported goods, which has reignited fears of a global trade war. These concerns are supporting the demand for gold as a safe-haven asset.
In addition to the geopolitical tensions, the flight to safety has resulted in a fresh drop in US Treasury bond yields, further benefiting gold, which doesn’t yield interest but is valued during times of uncertainty.
USD Weakness and Hawkish FOMC Minutes
Gold’s gains are also supported by some selling pressure on the US Dollar (USD), which has been underperforming despite hawkish comments from the Federal Open Market Committee (FOMC) minutes released on Wednesday. The minutes have reinforced the expectation that the Fed will pause on rate hikes for the time being, which could keep bond yields and the USD subdued in the near term.
However, the slightly overbought conditions indicated by the daily Relative Strength Index (RSI) above the 70 mark suggest that caution is needed for bullish traders. As a result, while the near-term bias remains positive for gold, the potential for consolidation or a pullback exists, especially as the market digests these factors.
Technical Outlook: Gold’s Path Remains Bullish
From a technical perspective, the gold price is poised for further upside if it can sustain strength above the $2,945–$2,950 resistance area. A breakout above these levels would signal the continuation of the upward trend that has been in place for the past two months, pushing gold toward new highs.
On the flip side, any pullback could find support at the immediate $2,928 level. If the price dips further, the next support zones lie at $2,918 and $2,900. If the selling intensifies and the $2,880 horizontal support is broken, gold could test lower levels at $2,860–$2,855 before reaching $2,834.
In summary, while gold remains in a bullish phase, traders should watch for signs of consolidation or corrective moves. The key support levels will be critical in determining whether the bullish momentum can continue or if a deeper retracement is in play.
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