- At the start of this week's trading, spot gold prices moved to a new historic record high, reaching the $2956 per ounce resistance level, and are stabilizing around the $2940 per ounce level at the time of writing the analysis, awaiting new strength factors to complete the sharp upward path or be exposed to sell-off operations for profit-taking.
- The demand for buying bullion as a safe haven has increased amid concerns about US President Donald Trump's tariff plans.
- Trump's latest measures have expanded tariffs to include wood and forest products, adding to previously announced tariffs on imported cars, semiconductors, and medicines, further fuelling inflation fears and escalating trade tensions.
Gold Investment Funds Witness Strong Inflows
According to trading and through gold trading company platforms, investor appetite is reflected in the rise in holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, which reached 904.38 tons, the highest level since August 2023. At the same time, attention is turning to the US Personal Consumption Expenditure report at the end of the week, which is the US inflation measure preferred by the Federal Reserve. While data is expected to show the slowest price growth since June, continued inflationary pressures may keep the Federal Reserve cautious about cutting interest rates. Most economists now expect the Federal Reserve to wait until the next quarter to cut US interest rates, delaying expectations of a rate cut in March.
US Dollar Price Halts Losses
According to forex market trading, the US Dollar Index DXY, which measures the performance of the US currency against a basket of other major currencies, has narrowed its losses to trade at 106.70, recovering from its lowest level in two months last week. Investors remain cautious about the US economic outlook after the S&P Global Purchasing Managers' Index data on Friday, which unexpectedly showed a contraction in the services sector despite accelerating manufacturing growth. Also, the report highlighted rising input prices and weaker business expectations amid growing uncertainty about government policies, prompting traders to increase their bets on a US interest rate cut by the Federal Reserve this year.
In the coming days, financial markets are bracing for major economic releases, including the personal consumption expenditure inflation report and the second estimate of first-quarter GDP growth, while comments from several Federal Reserve officials will provide further insights into the US central bank's policy path.
US Treasury Bond Yields Stabilize
The yield on the 10-year US Treasury note was little changed at around 4.4% at the start of the week, its lowest since mid-December, as traders weighed President Trump’s trade policies, new economic data and the outlook for monetary policy. The main focus this week will be on the personal consumption expenditures report, which could provide further insights into inflation trends, while the second estimate of US GDP growth in the first quarter of 2025 is expected to confirm an annual growth of 2.3%.
Last week, S&P Global Purchasing Managers' Index data showed an unexpected contraction in the services sector, while manufacturing growth accelerated. However, input prices rose, and business expectations weakened amid growing uncertainty about government policies. In general, the data exacerbated concerns about the US economic outlook, prompting traders to increase bets on potential interest rate cuts by the Federal Reserve.
Trading Tips:
Dear TradersUp follower, we recommend buying gold from every low level, considering the price rise over the past eight weeks, the longest streak since 2020. Furthermore, Gold-backed ETFs saw their largest net inflows since 2022 last week.
A positive start for US stocks
Last week, S&P Global Purchasing Managers' Index data showed an unexpected contraction in the services sector, while manufacturing growth accelerated. However, input prices rose, and business expectations weakened amid growing uncertainty about government policies. In general, the data exacerbated concerns about the US economic outlook, prompting traders to increase bets on potential interest rate cuts by the Federal Reserve.
On the other hand, Microsoft shares fell 1% amid reports that it cancelled data centre capacity lease contracts, which represents a contradiction with the sector's race to secure artificial intelligence infrastructure. Meanwhile, Nvidia shares remained stable before the release of their earnings this week, and there is great anticipation for an update on their guidance after the emergence of effective artificial intelligence models from China.
Will Gold Prices Rise in the Coming Days?
Technically and according to today's gold analyst expectations, the general trend for gold prices is still strongly upward, and despite its gains, it has moved all technical indicators towards strong overbought levels, which portends the imminent sell-off operations for profit-taking. Meanwhile, the factors of gold gains are still in place, especially with the continued global geopolitical tensions and the continuation of purchases by global central banks of gold as a safe haven. Also, the fears of a global trade war due to the escalation of tariff wars by the former US President Donald Trump. Therefore, the upward trend of gold prices is expected to continue in the coming days. However, investors should be wary of the possibility of a technical correction due to the strong overbought conditions.
Gold Price Technical Analysis and Expectations Today:
Regarding the forecast for gold prices, Goldman Sachs has raised its year-end target for the metal to $3100 per ounce, saying that central bank buying will be a major driver, as well as the expansion of exchange-traded funds.
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