GOLD rises above $2,900 with further upside targetsUS President Donald Trump vowed to impose "retaliatory tariffs" on all countries that impose duties on US imports as early as Wednesday evening (February 12) local time, raising concerns about the expansion of the global trade war and possibly accelerating US inflation. This is beneficial for gold to recover quickly.
Trump's latest round of tariffs unsettled markets comes just as Indian Prime Minister Narendra Modi prepares to visit the White House on Thursday. The Trump administration has complained that India's high tariffs have hindered U.S. imports.
Economists generally view tariffs as an inflation risk, with data released Wednesday showing U.S. consumer prices rose the most in nearly a year and a half in January.
OANDA:XAUUSD jumped $45 from Wednesday's low
After the release of stronger-than-expected US CPI data on Wednesday, spot gold prices fell sharply to $2,864 per ounce in early New York trading on Wednesday.
The U.S. Bureau of Labor Statistics reported Wednesday that the U.S. Consumer Price Index (CPI) rose 0.5% month-on-month and 3.0% year-over-year in January. Economists surveyed by Dow Jones expected the data to rise 0.3% month-on-month and 2.9% year-over-year.
Excluding volatile food and energy prices, core CPI rose 0.4% month-on-month and 3.3% year-on-year in January, while economists expected increases of 0.3% and 3.1%, respectively.
Economists have generally raised their inflation forecasts since Trump was elected out of concern that his policies, especially tariffs, could spark price pressures in the economy.
Gold is considered an inflation hedge, but because gold does not earn interest, a higher interest rate environment reduces its investment appeal.
However, fueled by safe-haven demand, gold prices have recovered strongly from lows. During the New York trading session on Wednesday, gold prices jumped above the original price of 2,900 USD and as of the time this article was completed it was trading at around 2,909 USD/ounce, up 45 Dollars compared to the level from yesterday's trading day.
Central banks' gold demand has increased as the World Gold Council (WGC) reported that central banks bought more than 1,000 tons of gold for the third consecutive year in 2024. According to the World Gold Council, central banks' gold purchases increased more than 54% year-on-year to 333 tons after Trump won the election.
Gold's recent rally has come alongside an influx of money into exchange-traded funds (ETFs) backed by the metal. According to Bloomberg calculations, global gold ETFs have grown more than 1% this year, reaching their highest level since November last year.
Technically on the daily chart, after OANDA:XAUUSD took support from the Fibonacci extension confluence with the upper edge of the price channel, it quickly recovered above the original price point of 2,900 USD. This was noted to readers in yesterday's edition.
Given its current position, it has room to continue rising with a target of around $2,927 in the short term, more than $2,952.
As long as gold remains within the price channel, the short-term uptrend will still prevail, while the Relative Strength Index has not shown any clear signs of a potential correction.
During the day, gold's uptrend will be noted again by the following technical levels.
Support: 2,900 – 2,891 – 2,869USD
Resistance: 2,927 – 2,952USD
SELL XAUUSD PRICE 2931 - 2929⚡️
↠↠ Stoploss 2935
→Take Profit 1 2923
↨
→Take Profit 2 2917
BUY XAUUSD PRICE 2878 - 2880⚡️
↠↠ Stoploss 2874
→Take Profit 1 2886
↨
→Take Profit 2 2892
