Gold prices (XAU/USD) extended their upward momentum during the Asian trading session on Friday, bolstered by growing concerns surrounding US President Donald Trump’s tariff proposals. Additionally, a decline in US bond yields across the curve provided further support to the precious metal, driving its continued ascent.
However, the expectation that the US Federal Reserve (Fed) will maintain its hawkish stance and keep interest rates elevated for an extended period could potentially weigh on the non-yielding yellow metal. Investors are awaiting the release of US Retail Sales data for January, scheduled later on Friday, which could influence market sentiment.
From a technical standpoint, gold remains in a strong uptrend, holding above the key 100-day Exponential Moving Average (EMA) on the daily chart. Nevertheless, the 14-day Relative Strength Index (RSI) is currently in overbought territory, exceeding the 70.0 mark, which calls for caution before traders position for further gains.
The first major resistance for gold lies in the $2,942-$2,943 range, corresponding to the all-time high reached earlier in the week. If the upward momentum continues, the next target could be $2,955, the upper boundary of the Bollinger Band, with a potential breakout above this level paving the way towards the psychological $3,000 mark.
On the downside, initial support is seen at $2,864, the February 12 low, followed by $2,744, the January 29 low. Crucial support is located in the $2,680-$2,685 zone, which coincides with both the lower boundary of the Bollinger Band and the 100-day EMA, marking a critical level to watch for further price action.
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