Gold prices continue to show resilience near their record highs as they end the week on a strong note. The precious metal's upward momentum is driven by the weakening US Dollar, which has alleviated market concerns over President Trump's tariff policies. Meanwhile, the British pound finds additional strength from positive UK Manufacturing and Services PMI data, and the EUR/USD pair maintains its position near multi-week highs close to the 1.0500 mark.
Market participants are keeping a close watch on interest rate trends, anticipating a series of rate cuts in both the Eurozone and the United States this year. The US Federal Reserve is expected to implement two 25 basis points cuts, while the European Central Bank (ECB) is projected to execute four similar cuts. This monetary policy outlook has sparked increased interest in gold as an investment, propelling the yellow metal towards a fourth consecutive weekly gain and a substantial 6% rise in January.
The recent surge in gold prices can be attributed to uncertainties surrounding President Trump's trade policies. Despite initial negative signals, gold prices accelerated higher on Friday, counterbalancing any downward pressures. The $2790/$2800 resistance zone remains a pivotal barrier for gold prices, with the market speculating on whether it will breach this level in the coming days.
The consolidation phase experienced by gold over the past three months appears to be ending as the metal shows signs of resuming its uptrend. With gold prices now on track to retest their all-time high and challenge the $2800 psychological barrier, market analysts suggest that dips in prices are likely to be shallow, offering strategic entry points for bullish investors. The former resistance levels at the $2730/21 zone have transformed into robust support areas, providing a solid foundation for further gains.
Should gold manage to sustain a break above the $2800 mark, it would signal a continuation of the broader upward trend. Such a move could attract additional investment interest, fueling further price increases. As investors navigate global economic uncertainties and fluctuating currency markets, gold continues to stand out as a preferred hedge and investment vehicle.