Gold prices continue their upward trajectory, reaching new record highs on Friday after surpassing previous benchmarks. On Thursday, the precious metal concluded trading significantly above the symmetrical triangle target of $2,785, as well as the former all-time high of $2,790. Closing in on the $2,800 mark early Friday, gold demonstrates resilience amid global economic uncertainties and geopolitical tension. The looming announcement of tariffs by US President Donald Trump further fuels its ascent as investors seek refuge in gold's safe-haven status.
The anticipation of tariffs over the weekend on imports from Canada, Mexico, and China heightens market volatility. President Trump declared a flat 25% import tax effective February 1, citing concerns over fentanyl. This move bolsters gold's appeal as an inflation hedge, while simultaneously affecting currency markets and economic growth projections. The US Dollar, lacking bullish momentum due to disappointing growth figures, tracks the retreating US Treasury bond yields. Expectations for a dovish Federal Reserve policy persist, influenced by these lackluster economic indicators.
In the Asian markets, the Japanese Yen capitalizes on risk-off sentiments and robust Tokyo Consumer Price Index (CPI) inflation data. The heightened inflation figures have spurred further speculation of interest rate hikes by the Bank of Japan (BoJ), adding another layer of complexity to the global economic landscape. Meanwhile, concerns over China's economic performance continue to weigh on market dynamics, impacting commodity prices and investor sentiment.
With a current 14-day Relative Strength Index (RSI) near 68, gold prices show potential for further upside movement before entering overbought territory at 70. This technical indicator suggests that gold has room to grow, bolstering its attractiveness among traders and investors. However, resistance remains a challenge; gold must achieve a sustained position above $2,800 to aim for the next topside barrier at $2,850.
Market analysts note that sellers may target this week's low of $2,731, followed by the 21-day Simple Moving Average (SMA) at $2,714 if gold prices begin to decline. Immediate support is identified at the previous day's low of $2,754, providing a crucial threshold for short-term fluctuations in gold's valuation.
Despite the complexities surrounding the global economic environment and trade policies, gold's status as a reliable asset persists. The precious metal's consolidation at record highs reflects investor confidence amid uncertainty and geopolitical tensions. As tariffs loom and economic data unfolds, market participants remain vigilant, monitoring developments closely.