- Summary:
- Gold price has renewed upbeat sentiment as central banks prepare to align themselves with the impact of a shift in US trade policies.
Gold price broke the $2,640 resistance on Thursday as safe haven demand provided fuel for the upside momentum. The yellow metal traded at $2,646 at the spot market at time of writing as traders weighed the impact of Donald Trump’s resumption of office on Fed interest rate policy.
The yellow metal had failed to break above $2,640 for the last two weeks, but increased focus on Trump’s economic policies has given it fresh impetus to breach the barrier. Trump is expected to institute a raft of measures that could cause significant disruptions to international trading.
There has been talks of tariffs against China, Mexico and Canada, and the list could grow longer. That could attract retaliatory measures against US exports and also make imports expensive. The sum of these factors could result increased demand for safe haven gold, hence drive up the commodity’s price.
China’s central bank already signalled apotential spike in goverment-driven demand for gold when it bought 160,000 troy ounces of the metal in November 2024 after a six-month pause. The move is seen as potential preparation to Trump’s policies as it came less than a month since his election victory.
Meanwhile, a recent survey by World Gold Council shows that many centra banks expect to purchase gold in 2025, notwithstanding the current elevated prices. That will likely keep XAUUSD on the ascending trajectory in the coming weeks. Elsewhere, yields on benchmark 10-year US were down by 5.4 basis points at the time of writing, adding pressure on gold price.
Gold Price Prediction
Gold price pivots at $2,634 and the RSI shows that the upside is likely to prevail. With the buyers in control, immediate resistance is likely to be at $2,645. However, a stronger upward momentum is likely to break above that level and test $2,650.
On the other hand, moving below $2,634 will shift gold price momentum to the downside. In that case, the first support will likely come at $2,627. A break below that level will invalidate the upside narrative. Also, extended control by the sellers could take the price lower to test $2,620.
