Gold Price Bulls in Control Near $2,900 as Trade Tensions Weigh on USD

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Gold prices (XAU/USD) remain steady near the $2,900 level during the early European session on Monday, though they are still trading below last week's all-time high. The US Dollar (USD) is hovering around its lowest point since December 17, following disappointing US Retail Sales data from Friday.

This, combined with concerns over potential global trade tensions sparked by US President Donald Trump's tariffs, has provided support for gold as a safe-haven asset. At the same time, market expectations that the Federal Reserve will maintain its hawkish stance and keep interest rates steady for a longer period are limiting the downside for the USD. 

Optimism surrounding US-Russia talks to end the war in Ukraine and a generally positive market sentiment are capping gold’s price movement. However, the near-term outlook remains bullish, favoring further gains for XAU/USD. Technically, while the Relative Strength Index (RSI) on the daily chart has retreated from overbought levels, other indicators continue to show a positive trend, reinforcing the constructive outlook for gold. 

Should gold continue to rise, resistance is expected near the $2,925 level, followed by the all-time high near $2,942-$2,943. A break above this resistance would likely trigger further bullish momentum, extending the uptrend observed in recent months. 

On the downside, immediate support is seen at $2,885, followed by last week's swing low around $2,855. Any further pullback could present a buying opportunity around the $2,834 area, which would help limit declines, with further support near $2,815. Additional support levels are found at $2,800 and $2,785-$2,784. A decisive break below these levels could signal a deeper corrective move.

Paraphrasing text from "Investing.com" all rights reserved by the original author