Gold Remains Confined to Range, Clings to Modest Gains Above $2,900

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Gold (XAU/USD) continues its upward momentum for the second consecutive day, reaching the $2,915 level during the Asian session on Tuesday. Concerns that US President Donald Trump's threatened tariffs could spark a global trade war continue to drive demand for the safe-haven metal. Additionally, expectations of further interest rate cuts by the Federal Reserve (Fed) are also fueling interest in gold, which does not yield any returns.

However, a rise in US Treasury bond yields and a modest recovery in the US Dollar (USD) from its lowest level since December 17 may cap gold's gains, as these factors could discourage further bullish bets. Furthermore, optimism over a delay in the tariffs' implementation and ongoing talks to resolve the Russia-Ukraine conflict may limit any further significant rise in gold prices.

From a technical perspective, the recent range-bound price action could be seen as a consolidation phase following the recent rally to record highs. Oscillators on the daily chart remain in positive territory, indicating that the path of least resistance for gold is still upwards. However, with the daily Relative Strength Index (RSI) nearing overbought levels, any further increases may face strong resistance near the $2,925 level. A breakthrough here, followed by the $2,942-2,943 area (the all-time high), could signal a continuation of the two-month-long uptrend.

On the downside, gold has support just below $2,900, with the $2,878-2,876 range acting as a key level. If prices drop further towards $2,860-2,855, it could present a buying opportunity, limiting downside risk at $2,834. However, a decisive break below this level may trigger technical selling, pushing XAU/USD toward $2,815, then $2,800, and potentially down to the $2,785-2,784 support region.

 

 

 

 

 

 

Paraphrasing text from "FXSTREET" all rights reserved by the original author