Gold Sees Modest Gains as Trade War Fears Linger

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Gold (XAU/USD) has recovered some of its losses after hitting a one-week low in the previous session. Continued uncertainty and concerns surrounding US President Donald Trump’s tariff plans are providing support to gold, a traditional safe-haven asset.

However, analysts believe that the prospect of higher tariffs could lead to inflation concerns at the US Federal Reserve, potentially prompting the central bank to keep interest rates elevated for longer. This could limit gold's upside, as higher interest rates reduce the appeal of non-yielding assets like gold.

Later today, US New Home Sales data for January will be released, and Fed officials, including Raphael Bostic and Thomas Barkin, are scheduled to speak. On Friday, the market will focus on the release of the US Personal Consumption Expenditures (PCE) Price Index for January. 

Gold prices have edged higher, remaining within a narrow trading range. The bullish outlook for gold persists, with the price staying above the key 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is above the midline near 64.0, indicating that the overall trend is still upward. 

The all-time high of $2,957 remains a significant resistance level for gold. A breakout above this could push prices toward the next targets at $2,980 and the psychological $3,000 mark. 

On the downside, the February 25 low of $2,888 serves as initial support. Further declines could bring gold down to $2,795, the lower boundary of the Bollinger Band, with $2,718 (the 100-day EMA) acting as a key support level to monitor.

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