Gold prices experienced a notable resurgence during the mid-American trading session, driven by a combination of economic factors and geopolitical uncertainties. The US Dollar and US Treasury bond yields have been on the rise, following the US House's approval of the Republican Budget plan, which paves the way for advancing former President Donald Trump's tax strategies. Meanwhile, the Gold market has responded to weakening US consumer confidence data, with the Conference Board Consumer Confidence Index plummeting by seven points to 98.3, marking its most significant decline since August 2021.
The 14-day Relative Strength Index (RSI) for Gold has halted its downward trajectory and currently hovers near 64, suggesting potential for further gains. This technical indicator points to additional upside potential, with the next resistance levels set at $2,970 and the psychological threshold of $3,000.
Earlier in the session, Gold prices had dipped to a one-week low but have since regained some lost ground. This rebound has been supported by ongoing concerns surrounding US President Trump's tariff plans, which have introduced an element of instability in the markets. To address these concerns, President Trump signed an order to initiate a new national security investigation under Section 232 of the Trade Expansion Act of 1962.
However, Gold's upward trajectory may encounter resistance from a modest recovery in the Greenback and rising US Treasury bond yields. Despite this, the 21-day Simple Moving Average (SMA) at $2,883 continues to provide support for Gold prices. Should prices fall below this level, the February 14 low of $2,877 could be tested.
In addition to domestic factors, international dynamics have also played a role in shaping Gold's recent performance. China's total Gold imports via Hong Kong in January plummeted by 44.8% from December, reaching their lowest point since April 2022. This decline highlights a decrease in demand from one of the world's largest Gold consumers.
Meanwhile, expectations of a rate cut by the Reserve Bank of Australia (RBA) have been bolstered by recent data, adding another layer of complexity to the global economic outlook. These expectations have contributed to increased investor interest in Gold as a safe-haven asset.
Looking ahead, if the current rebound in Gold prices gains momentum, it could potentially retest the all-time highs of $2,956. The topside barriers at $2,970 and $3,000 will be crucial levels to watch as traders gauge the strength of this recovery.